Welcome to the forum! Would love to get your take on how Rivian's stock could perform.
thanks for the greeting!
I’ll take a swing- but unfortunately I have more questions than insights. Maybe sharing my thinking can provide some value to your question.
the biggest component to the valuation is that there are major buyers with war chests waiting to invest.
there are a ton of new mandates for institutions to invest into the ‘green’ economy- specifically transitioning the industrial revolution into sustainably minded top to bottom practices. Rivian executes this narrative with precision on this point. Note the recent questions reported from the underwriters suggesting they will not comment on value until the battery supply chain is PROVEN to be sustainable and in line with human rights (ie mineral mining). No one would have cared 10 years ago. But the mandates are real and the instituions are going to write big checks at a high price.
Despite the thorough examinations- rivian will IPO successfully. Little doubt. For no other reason than the money with purpose is there. the EV demand is real. As such - profitability is not required. For many investors that may be the struggle on top of the sticker Price shock.
other components I find interesting in the value question-
rivian shares a similarity to we work- only in that they are a ‘life style company’. They are selling several products and services to their adventure enthusiast. it’s not just a car Lot. They have recurring rev that smells like MRR, they have insurance income (well commissions at least), they have data - tons of data and cameras, they have IP up and down their touch points, they have a ton hard assets and they have batteries! they are even selling stock to their pre-holders! They really know their customer!
for individuals like myself considering investing via DSP- its mixed. buying a car is not the same as buying stock in the same company. I will enjoy the car ride no doubt but will I enjoy the stock ride- only if it has a five year max pack attached.
for me- the immediate appeal of rivian going public is to be a part of something with shared values. But how about real performance? i want the promise of above market return. There’s a check mark for the the first point but not the second. I sincerely question- as I do any company that IPOs today or within last 2 years- wheres the future return if you recognized it today . tech has had a great run (and yes rivian is all but benefiting from that) in these frothy times- overvaluation and abundance of money is more than prevalent . Soft bank fumbled 100B and no one blinked! This is great for entrepreneurs like RJ but is it great from the position of a minor stockholders swinging toothpicks.
so this valuation must be addressed. our toothpicks are given little visibility through the IPO veil. How much future value is getting recognized today- is the high level question? milestones are being discussed- but so many are unproven. Not even close. Rivian is great at making extraordinary prototypes- but can they consistently turn out the product to satisfy current demand. every major known brand is sprinting there now. The distance between competitors is closing. Even Jag is going to all electric at Bentley price points. Now can rivian execute in new markets? Can they sell their skateboard to other brands? Can they execute in the autonomous car economy? how Quickly these last few occur will determine the pace of long term gains.
short term gains at a 80B valuation are being paid for up front by the green economy investors. let me suggest that short term delivery will have a huge impact on early term stock price. I would speculate a wild ride over the first year, at 80B they are setting stage for a rocky experience. In the words of bezos- RJ where are my vans?
at the end of the day- they have to deliver a car. Cars are hard to profit from. So it’s future market share that speculates value in this industry. it took Tesla a very very long time- following car #1 off the line- to get good at production And figure out redundancy to leap past everyday hiccups. Tesla’s chip shortage solution if you have not read it- is a perfect example.
so-
is a 80B valuation high? Yes
if you are looking for short term stock performance- I will suggest the buy-in price if at 80B will be off the table
if you are looking for long term performance- wait until some meaningful delivery metrics and or major deliverables are met. The ride will lie;y remain flat for 2 years. Rivian has to prove control of the top to bottom line, release into new markets and expand their product type to leap past its current price. My investment metrics- delivering 20k beyond preorders, 80% nationwide service centers open and a new plant broken ground- and no major recalls/battery failures.
if you are looking for a bad ass truck or suv- just buy it dont invest in it (rather put down 1k and wait a year or two same experience of joy).
Being a pre-order holder for a R1S has given me a whole new perspective about ’wait and see’. I know I’ll have an amazing ride- but I dont know when.