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Rivian Automotive share price zooms again amid EV mania

Is Rivian taking investors for a ride?
The post Rivian Automotive share price zooms again amid EV mania appeared first on The Motley Fool Australia. –

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of new initial public offering (IPO) electric car upstart, and purported Tesla-killer Rivian Automotive (NASDAQ: RIVN) tore up the track yesterday, racing out of the gate on IPO Day to score a 29% gain.

Do you think a gain of that size might have caught a few investors’ attention, and enticed them to try to join in the momentum trade? It did. Today as of 10:45 a.m. EST, Rivian stock is up another 10%.

So what

But seriously, that’s all that’s happening today. There is literally no new news to justify today’s rise in stock price. No news to explain why Rivian is now — as Barron’s puts it — “the most valuable U.S. auto maker after Tesla.”

Now what

With a market capitalisation rapidly approaching $114 billion, Rivian stock is now more expensive than either General Motors ($89 billion) or Ford Motor Company ($79 billion). Yet over the past year, GM sold more than $130 billion worth of cars and trucks worldwide, Ford sold nearly $135 billion, and Rivian sold… zero.

Now, maybe that makes sense. Maybe Rivian will surprise us and use its order from Amazon for 100,000 electric delivery vans as a springboard to tens and hundreds of billions of dollars of sales in the future. Or — and bear with me here for just a minute — this brand new automaker might encounter hiccups as it begins production, and fail to fully live up to the hype.

I’m not saying it will happen. But I am saying it would be prudent to prepare yourself for the possibility that Rivian stock will go back down. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Rivian Automotive share price zooms again amid EV mania appeared first on The Motley Fool Australia.

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Rich Smith has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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