Out of all 2021’s EV IPO’s; one could easily argue that Rivian (NASDAQ: RIVN) had a headstart on its financial credentials. The truck maker aroused a hotbed of interest amongst prominent names; receiving backing from both Ford and Amazon before moving public. Following a perfect blend of bold projections, big-name backing, and retail hype – Rivian reached a valuation of over $160B just days after its trading debut. However, as we’ve seen throughout EV IPO’s – an eager upside gave way to rampant depreciation as the market focused on a lack of fundamentals.
It seems that Rivian hasn’t lost its allure quite yet. RIVN stock gained around 6.8% premarket on a disclosure that multiple pension funds including CalPERS – the largest public pension fund in the U.S – are buying into the company at a time when its stock has dropped by over 50% – an enticing discount, but when will the company start turning a profit?
With Ford, Amazon, CalPERS, and Third Point all holding sizeable stakes in the company, it wouldn’t be surprising if another retailer rally was to follow. This being said, Rivian is still yet to prove anything to investors and remains bunched with the EV IPO’s that are yet to create any sort of revenue. The big brand investments have proved more of a lifeline to Rivian than anything else – whilst securing big fourth-quarter gains for both Ford and Amazon following their investment.
Rivian has lost a lot of its value since its IPO, so perhaps the company appeals to funds looking for discounted, risk-reward-based investments. The only real competitor to Rivian is – its key investor – Ford, which has already largely dominated the EV truck market with its highly demanded F-150 Lightning. GM follows behind but the market gap continues to widen. RIVN stock may have gained today, but there is plenty more downside potential until the company starts posting positive fundamentals.
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Oliver is a financial writer and analyst specialising in the US stock market, with years of personal experience in understanding micro/macroeconomic structures, market trends and fundamental analysis.