Why stock getting hammered last few days?

[Mark_AZR1T]

Rivian was and is a car company that never executed cleanly and never hit scale. The market isn’t buying the pivot to “software/tech company.” After 4½ years of ownership, I still think they’re too good to die but not strong enough to stand alone.

I hope I’m wrong, as we love our Rivian's, but the realistic path is an acquisition or absorption.

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[kurtlikevonnegut]

Rivian was and is a car company that never executed cleanly and never hit scale. The market isn’t buying the pivot to “software/tech company.” After 4½ years of ownership, I still think they’re too good to die but not strong enough to stand alone.

I hope I’m wrong, as we love our Rivian's, but the realistic path is an acquisition or absorption.

Bit premature to say they "never hit scale" all things considered. In 2-3 years that could be accurate if they never hit their full run rate for R2 at Normal but they are on track with Tesla at this point in terms of manufacturing scale if not slightly ahead.

 

[mdpa]

The good news is that Trump is against the Chinese brands running free reign in the US. Probably the only thing saving Rivian right now. That won’t last forever, but hopefully long enough for the R2 to make some headway.

The Tesla Model Y is the number one selling EV in China, but the next 10 are all Chinese brands.

 

[Great Gatsby]

Jeesh. All the doom and gloom over the stock price?

Let's not forget that Tesla has heavily distorted what the stock for a car company should look like. It hovering above $10 is actually fine IMO. It's not a meme stock (yet) and not a reflection of the company.

I love how often the "will Rivian make it?" conversations come up. Same thing with Lucid. Hey guys, Maserati, Buick and Infiniti are still making vehicles. If they weren't part of a bigger conglomerate, they would have been folded by now. Rivian and Lucid are actually making vehicles people like. For Rivian specifically, the R2 is looking real good and a lift for the company is around the corner.

I invest in Rivian because I like the company and their ideals. I'm not pouring money into it because IMO car companies are not the best investments. What you do with your money is on you. The company will be just fine and the cyclical nature of the market will continue until the end of time. It sucks now, it will be great later and likely suck again in the future too. Feel free to keep being pessimistic if that is your cup of tea, but I personally do not see the reason for it. They are a way better company now than they were a year ago.

To answer the question - why is the stock down? Simple, you can make your own guess. No one has a certain answer. Plenty of reasons offered up but I do not believe it reflects Rivian's ability to execute or make a great vehicle. It's just noise like everything else nowadays.

 

[Biturbowned]

Literally nobody knows

 

[SANZC02]

I thought it was down for a pre-summer sale, I took the opportunity to buy some while it was on sale….

Numbers wise, if you happened picked some up at the sale price of $13 it only needs to get 16.25 to make 25%….

 

[UnsungZero_OldTimeAdMan]

The good news is that Trump is against the Chinese brands running free reign in the US. Probably the only thing saving Rivian right now. That won’t last forever, but hopefully long enough for the R2 to make some headway.

The Tesla Model Y is the number one selling EV in China, but the next 10 are all Chinese brands.

I don't foresee any future US president, or congress, to allow Chinese automakers to enter the US for a long time. Not until all brands can operate and sell on a more equal footing. The economic impact, and political cost, is too great. And the big three are simply "too big to fail". I'd even say the protection extends to foreign brands who have invested significantly in the US (Toyota, Nissan, BMW, MB, VW...). Unless the Chinese are forced to open factories and provide US jobs, I doubt they would ever be allowed in. And this is the same path most of the aforementioned foreign brands were allowed in.

 

[mkg3]

As discussed in another thread, the last earnings call was horrible. The chart below is the daily price action since the 4/30 to today. They announced after the market close so the reaction is seen on the 5/1.

The primary reason for steady decline in the price has to do with both VW ($1B) and Uber ($300M) investment in Rivian first half of this year. In both cases, the investments were in exchange for equity stake. In other words, dilution, making more shares available for the same future value of the company.

As a result, people dumped the stock, it finally reached oversold condition on 5/19 and bounced from mid $12s to $14.15 today.

If Rivian is not cashflow positive by this time next year, there definitely will be hard questions to answer. At the current financial status of VWG, Oliver Blume is also on his last chance so who knows what will happen to the JV and further VW investment (which will dilute more share base). Just as Ford sold off Rivian shares, VW could easily do the same and end the JV. Since VW currently owns 15%+ or Rivian shares, that would claps the share price if that happens.

 

[Gen(R3)Xer]

I read it was because of scaling back the DOE loan. Even though Rivian increased the production capacity of phase 1 by 50% it would appear that phase 2 is a wait-and-see proposition and will not be funded by this initial DOE loan. I think that’s smart on their part, but the market thinks otherwise. They might have also been pressured to act or lose the loan altogether. The Georgia Plant seems to have been in limbo for quite a while. Things are moving a lot more slowly than expected. Slow and steady wins the race, in my opinion, but again the market lives off of massive speculation and instant returns. I also believe that Rivian is being shorted, which should be an illegal practice, but I digress.

Also with all of the investment in AI it would appear Rivian’s cash burn isn’t going to decrease anytime soon, so profitability is now even further away. Again, in my opinion, this is the cost of developing a software-based vehicle. Rivian has come the closest to any US EV maker in replicating Tesla’s success, but they have a long way to go. I’m in it for the long haul though.

 

[phaduman]

Why is the stock going up now? (Not that I am complaining - except should have bought some more at $12)

- June 9th delivery approaching
- electrek report of impressive efficiency

 

[Weekend at Gary’s]

Every Boxing day, I sell just enough to take my $3k loss for the year...

Then 02Jan I move it over to my Roth and buy it right back 🫠

Maybe I don’t pickup on the sarcasm or understand taxes? Wash sale is still applicable and easily overlooked when bridging accounts or trading platforms.

 

[Gen(R3)Xer]

Why is the stock going up now? (Not that I am complaining - except should have bought some more at $12)

- June 9th delivery approaching
- electrek report of impressive efficiency

I think it was because they announced the specific delivery date rather than the vague Spring timeline. I hope it goes to $20-$25 a share by the end of the year.

 

[Riviot]

Maybe I don’t pickup on the sarcasm or understand taxes? Wash sale is still applicable and easily overlooked when bridging accounts or trading platforms.

Shares were owned in taxable accounts. Loss was realized in taxable account and gives credit. New purchase is in Roth non-taxable, so any "growth" and profit/recovery won't be taxed when sold.

 

[mkhuffman]

Shares were owned in taxable accounts. Loss was realized in taxable account and gives credit. New purchase is in Roth non-taxable, so any "growth" and profit/recovery won't be taxed when sold.

You can do the same thing with a IRA to Roth conversion. Take the tax hit now and all future growth will be untaxed.

There is a lot of pessimism in this thread, and it is warranted. But I am optimistic that Rivian can make it on their own.

The R2 must be cash flow positive. It's required. It might not generate enough cash to cover ongoing investments, but at least that means the more they sell, the less cash they burn. If they can't do that, they're finished. If they can, and I think they will, then they can still make it as long as they manage the cash burn.

One area of concern not discussed yet is their service cost. They really need the quality of the R2 to be better than the R1 or they will burn all the cash the R2 makes with service center cost. It can be done. Maybe they should hire some Toyota leadership to oversee manufacturing quality. VW isn't going to be much help there. LOL.

 

[mdpa]

If they show signs of failing, Elon Musk could buy them and at least keep them American owned.

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