Why is RIVN market cap ($12 bln) only equal to cash on hand??

[jjswan33]

Correct! I never said how fast you get to 80mph. But once there, the wight is already moving at 80, so weight not relevant.

EDIT: Well... technically, there is more weight on the wheel bearings so there is a teensy bit more resistance on the heavier vehicle. But hats off to well greased modern wheel bearings!

You're also ignoring rolling resistance, weight will impact that.

Overall your point is right though. When speaking about power the aero has a factor of v^3 but the rolling resistance and drag only are proportional to v so the faster you go the more correct you are.

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[docwhiz]

To get back to the topic...
RIVN faces several obstacles to success. As a startup, they face high overhead costs and low production. They are currently ramping up production and, following Wrights law, their incremental costs should drop to the point where they can start making money on each car sold. (I believe RJ has projected this point next year.)
It is good that they have a large cash stash as that will tide them over for a while. They also have grand plans for a new factory and new models which will require lots of money.
Overall, I am optimistic that they will succeed but we have to be cognizant of the fact that they could fail. (Tesla, after all, almost went bankrupt several times.)
So, the value of the company is value of their cash on hand which is probably appropriate at this time. Hopefully they will work through this startup phase and show a solid path to profitability. Then the stock should increase in value beyond book value.
(I am new to Rivian so not invested. I did invest early on in Tesla and lived through many ups and downs to ultimate success but it was a nail biter.)

 

[SASSquatch]

You're also ignoring rolling resistance, weight will impact that.

Overall your point is right though. When speaking about power the aero has a factor of v^3 but the rolling resistance and drag only are proportional to v so the faster you go the more correct you are.

Just so that I can test my math. The energy expended to get a 20,000 lb vehicle to 80 mph is the same as the energy expended to get a 5,000 lb vehicle to 80 mph when they both have the same drag coefficient?

My god, and this entire time, OEMs have been trying to shave off weight. Somebody write RJ and tell him he needs to make the R2 weigh even more than the R1.

 

[jjswan33]

Just so that I can test my math. The energy expended to get a 20,000 lb vehicle to 80 mph is the same as the energy expended to get a 5,000 lb vehicle to 80 mph when they both have the same drag coefficient?

My god, and this entire time, OEMs have been trying to shave off weight. Somebody write RJ and tell him he needs to make the R2 weigh even more than the R1.

I was referring to a vehicle already traveling at 80 mph. It will take more energy to bring a 20k vehicle to 80mph. In your example it takes 4X more energy (or force) to accelerate an object that is 4 times heavier.

The physics of an EV is obviously more complicated though since a 20k EV traveling at 80mph has a higher momentum so more potential to regen while slowing back down.

 

[Dark-Fx]

Just so that I can test my math. The energy expended to get a 20,000 lb vehicle to 80 mph is the same as the energy expended to get a 5,000 lb vehicle to 80 mph when they both have the same drag coefficient?

My god, and this entire time, OEMs have been trying to shave off weight. Somebody write RJ and tell him he needs to make the R2 weigh even more than the R1.

Depends on drivetrain efficiency too. For sure there could be a situation where this is true.

 

[SASSquatch]

I was referring to a vehicle already traveling at 80 mph. It will take more energy to bring a 20k vehicle to 80mph. In your example it takes 4X more energy (or force) to accelerate an object that is 4 times heavier.

The physics of an EV is obviously more complicated though since a 20k EV traveling at 80mph has a higher momentum so more potential to regen while slowing back down.

We are on the same page. This entire aside was started by arguing the merits of sedan vs. other form factors.

I personally loathe sedans. The argument was made that sedans are more efficient. My argument was that A.) that is false even if you simply are equating drag coefficient to efficiency.

Drag, weight, rolling resistance, etc. all matter when you are determining the overall efficiency of a vehicle.

There are many examples of more efficient form factors other than sedans. That is all I'm arguing.

 

[quartz]

If you think Rivian is way undervalued, then put your money where your mouth is and BUY, BUY, BUY, and help raise the share price.

I'm sitting on $20K in losses so help a brother out...

Seems like a good candidate for tax-loss harvesting.

 

[SASSquatch]

Seems like a good candidate for tax-loss harvesting.

Great minds think like. Waiting to the end of the year hoping the loss part of the harvest is reduced...

 

[quartz]

Great minds think like. Waiting to the end of the year hoping the loss part of the harvest is reduced...

Why wait? Bigger loss means more carry-forward to offset future cap gain. It's unlikely RIVN will drastically go up within 30 days, after which you can buy back more shares at a lower price for a similar total value.

 

[SASSquatch]

Why wait? Bigger loss means more carry-forward to offset future cap gain. It's unlikely RIVN will drastically go up within 30 days, after which you can buy back more shares at a lower price for a similar total value.

It gets tricky if I am buying the same stock. Let's say I sell my $30K in Rivian stock for $10K taking a $20K loss that I then "harvest."

I wait 30 days and buy back roughly the same amount of shares as I had before because Rivian's stock doesn't move all that much.

The cost basis for the Rivian stock is now going to be $10K because I harvested the $20K so if Rivian takes off in say 2 years and the stock recovers to where I originally purchased it, I actually see no tax savings and may actually have a tax penalty.

 

[quartz]

It gets tricky if I am buying the same stock. Let's say I sell my $30K in Rivian stock for $10K taking a $20K loss that I then "harvest."

I wait 30 days and buy back roughly the same amount of shares as I had before because Rivian's stock doesn't move all that much.

The cost basis for the Rivian stock is now going to be $10K because I harvested the $20K so if Rivian takes off in say 2 years and the stock recovers to where I originally purchased it, I actually see no tax savings and may actually have a tax penalty.

Sure, makes sense. IMO it's good to have multiple lots at varying cost basis, so you can sell from different lots depending on your tax liability. Similar to contributing to both Trad and Roth IRAs so you can accommodate change in tax situations during withdrawal years.

 

[140 degrees]

The trick in tax loss harvesting is to sell your losers before a year, when they become long term capital losses. When you buy back and eventually sell for a profit, make sure to hold it until it is a long term capital gain. If you have a year where your taxable income is below 83K(married, filing jointly), there is no tax at all on long term capital gains! Otherwise the 15% rate applies all the way to 517K.

 

[docwhiz]

https://www.autoevolution.com/news/...y-have-a-backup-others-don-t-have-216000.html

Rivian is also having a hard time, but it is in a more comfortable position. Amazon and Ford have helped it raise a fortune. It had $18.423 billion in end cash position by the end of 2021 and dropped that amount to $12.099 billion by the end of 2022, which shows it is burning money fast. The BEV maker’s excuse is that it is investing in a new factory in Georgia and also developing new, more affordable vehicles. The R2 family has a higher production volume potential than the R1 family currently for sale. Apart from the investments it made in Rivian, Amazon also bought 100,000 electric vans from the company. Rivian didn’t even manage to manufacture all of them yet. It is very unlikely that this BEV maker will fail with such a financial backup.

 

[tylerdurden03]

RIVN is forecasted to need another $40bln to reach cash flow positivity in 2026. Inestor’s like the cash war chest but they are burning through cash and will need financial markets to be open to raise more money to reach profitability if the forecasts are right. So it makes sense for the stock to trade at its cash value given the risk of them not making it to profitability. I recently bought some stock but acknowledge its a risky play and more a reflection of the fact I like the company and hope it does well but pricing isnt irrational in my view.

 

[mkg3]

All this talk about tax loss harvesting, it's worth mentioning that the most effective way is to offset the current year capital gains (short and long term). If one's loss exceed the capital gains, then the loss is capped at only $3K/yr and one has to carry the loss forward.

Also there is a wash rule, so that you cannot buy the same or similar stocks within the 30 day-period, and still take the loss.

As for 0% cap gains tax for married filing jointly applies to AGI so part of the cap gains will be taxed at 15% for above $83K. I have no idea why any married couple that has AGI less than $83K would be buying any Rivian or vehicle that costs $80K+.

As for the 15% cap gains tax until $517.2K, if one's cap gains are beyond $250K, there is an additional medicate tax of 3.8% on the top of 15% (part of Obama Care implemented then).

Personally, I'm not a fan of loss harvesting strategy in general. Yes it makes sense to offset the capital gains; however, depending on the underlying stock's ability to regain the loss or into profit within a year, it would depends all on the individual lot costs and not the average cost.

I know many of you know this stuff but just in case for others. Not in the financial industry, just have lots of personal stake in the market.

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