This thread is for general analysis of ticker RIVN - Rivian Automotive. There’s been mentions of it in Trading Floor and in write ups recently so it would be good to consolidate and brainstorm here
So disclaimer I actually reside in the general area that rivian has set up their manufacturing headquarters in the old Mitsubishi plant in good old Illinois.
Here is my take on #rivn this is yet another EV startup in the long list of hoopla they bring. However unlike Lucid, Rivian went non SPAC route to the market. They crushed their IPO because every degen thought it was the next TSLA. They raised tons of money from FOMO from Amazon and Ford to name a few. Those two big ballers bounced at their opportunity to take their profits. F no longer is involved in partnership for development. RIVN is still contractually obligated to build the Amazon delivery vans. Here is where the problem lies. It seems to be the only thing they are building currently. I personally know a few people who work there or have worked there. I happen to have a few that work for me that previously were employed there. Majority of what I hear is the assembly line rarely runs other than building Amazon vans. And majority of the time they stand around but forced to work 12 hour shifts 6 days a week many times.
I do see a good bit of their trucks running around the area now. Mostly all owned by employees (they built those first). And new hires were given fat rebates towards new Rivian product.
Supply chain. Keep this in mind most of the auto manufacturing had preexisting contracts with suppliers for semi conductors wiper blades tires you name it majority of the parts they don’t build themselves. F. GM. TM the top three automakers in the world. And frankly let’s for comparison sake throw TSLA in the picture. The suppliers are obligated to supply their contracted manufacturers with parts. Many of these agreements last years. RIVN is just getting started. Which means the supply chain as well as being a startup in general is gonna suffer from starting up at frankly the worst possible time you could become an auto manufacturer.
My Bull case on RIVN is their trucks rock and are way cooler than TSLA and let’s face it red blooded Americans buy trucks whether gas is 1 dollar a gallon or 10. Make a cool truck that doesn’t use gas you are on to something. I think these guys make it and become players down the road. Like a long ways down the road. And I truly hope they do before their cash supply runs dry.
1 Like
RIVN is currently trading not that far above it’s net cash value.
The company had around 16.5B net cash at the end of 4Q last year. Q1 estimate is 1.8B in negative FCF, which leaves them with around 14.7B as of the end of March, current market cap at today’s closing price is 30B
1 Like
I agree with you they have the cash from initial investments and IPO however you can burn through a lot of cash relatively quickly if your outflow is far greater than your inflow. Also the numbers they report drastically change daily as far as cash on hand.
Just recalled two things I forgot to mention when considering RIVN. Apologies for blowing up this post repeatedly.
Bad pub. Rivian attempted to throw a price increase on pre existing orders that led to a large amount of cancellations. The legacy automakers as well as Tesla price protect all previously ordered units but raise pricing on any order ther after. In my opinion this was a mistake by a rookie trying to play in the big leagues.
Lastly let’s not forget there is ever growing competition in the EV segment especially the truck segment as F is launching the Lightning shortly. And frankly the F150 is the top selling pickup truck in the world ever for a reason. Plain and simple the name.
While it is true they are burning cash, companies for the most part don’t trade below their current net cash position. If they were trading below their net cash position it would open up an opportunity to do a hostile takeover and liquidate the company.
Obviously in markets nothing is guaranteed, but the stock’s net cash position is a pretty strong support level.
1 Like
Was not disputing your statement on cash or burning through it. Or support levels. But myself as like most of us here I am sure are looking for opportunities to make money and be profitable. Knowing what a companies low ultimate low is of no concern to me. Unless I need to know when to cut my puts.
But you have a valid point with the aspect that it more than likely doesn’t run down much more than it currently has. However don’t forsee it running up a whole lot either.
Yesterday’s news but didn’t see it posted anywhere:
Bullish news for Rivian and Amazon
Apparently Ford and possibly Amazon are gonna sell a chunk of RIVN shares soon priced at $26.90/share.
https://twitter.com/davidfaber/status/1523078685200306176
1 Like
Damn that’s pretty big. They jumped ship quick.
If RIVN starts falling to the $20B market cap, going to start DCAing on them. Like Naked said, they are approaching valuation to the net cash position, but arguably they could burn through it very fast.
Out of all the other EV SPAC or IPOs, I have actually seen a Rivian in the wild (NYC) and I do think they have a very good, different EV compared to what is on the market today. Honestly, Elon should have Tesla buy Rivian at this price, way better looking than their Cybertruck and Rivian has a big backlog of orders to fulfill.
2 Likes
I’d have to guess this has to be tied to the fact that when F made its initially investment they were in a joint engineering project to use a rivian skateboard for some undisclosed F product. I know that to be factual. However I also know they scraped that. As F apparently realized they can do the same on their own. As evidenced by the fact that their are currently more Ford Evs on the road than Rivian. And that’s all rivian makes. Pretty bearish on rivian myself. I think Lucid and Tesla have that market at their finger tips. And Polestar is coming in hot (my personal favorite) Rivian entry into that segment with truck being their only product basically was not good timing with F coming with lightning. GM with their truck and the HUmmer EV.
2 Likes
So take this with a grain of salt as it seems all these news sites are basing their information off a Seeking Alpha article.
2 Likes
If RIVN tanks, might put some additional downward pressure on AMZN too. I’d assumed the RIVN markdown was already priced in, but the reaction to AMZN earnings suggests maybe not. In which case folks will be quite sensitive to the effect of RIVN on AMZN. Bit of a tail wagging the dog, there.
2 Likes
They are burning cash but they’re spending on building an auto plant, something tangible. It’s not like they’re pissing it away developing some vaporware software or something.
Another 10% decline and RIVN’s trading at book value. This market might be punishing unprofitable growth companies, but I think RIVN’s future business has SOME kind of positive value, not negative value which is what is being implied if it dips below book value. After deducting cash RIVN basically has a 7B market cap right now.
Long RIVN and short LCID might actually be a great trade right now, they’re both in the same boat but RIVN has a lot more cash.
Unless you are keeping books at Rivian none of us are really privy to the cash on hand. Lucid makes a much more desirable car currently and is filling orders. They are certainly overvalued that’s factual. However Rivian already has a plant that is currently doing nothing. They are long in workers with lots of them. That don’t do anything. This company is a dumpster fire. Lucid has some straight up big brains running that ship. I’m gonna go with rivian pissed through tons of cash in Q1 and your assumption that they are trading at “book value “ is nothing but an assumption. Their only trucks on the road are the ones driven by employees that were given something like 20k dollar rebates to buy them. They are currently struggling to fulfill their Amazon van order.
We need to be careful with comments like this, accusing a public company of cooking the books does not help the analysis we do here. At the end of the day, we need to take financial info at face value. Not only that, but I have no doubt Rivian is sitting on a shit ton of cash. Everyone and their mom knew Rivian was the most overvalued IPO of 2021, and this presents a unique opportunity to benefit from it. With everyone running from the stock market, this may present a semi-arbitrage event where you can invest in company at less than its book value. A company that is in a growing space.
It’s also important to keep in mind what Rivian will be spending their cash on. Other than salary expenses, their biggest items will be Capex in the form of a plant (and other inventory items), which is an asset in itself.
Short term I’m hoping Rivian absolutely shits itself this week during earnings and gives an opportunity to load up (long term outlook).
2 Likes
If you’re betting on RIVN pulling an Enron I’m gonna go ahead and say it’s safe to bet against that.
If their financial statement says they have X billion in cash, we need to assume they actually have that cash in the bank. They report earnings this week which includes an update to their cash balance.
If you want to make a valid argument you can say something like “they’ll eventually burn through all that cash and have nothing to show for it,” which is certainly valid, but trying to say they’re gonna pull an Enron isn’t a useful analysis unless you have some basis to back that up.
1 Like
I think maybe you mistook what I was saying for implying they have no money. I said we don’t know how much they have. As in they are currently spending a lot and not delivering product. That burns cash. While also investing in two plants and ramping up hiring. Simply meant we should be cautious of assumption they have brinks trucks full of cash sitting around still til we hear confirmation of that. Along with large investors like F bailing on them. I actually hope they do succeed they are a positive in my personal local economy if that ends up the case.