IPO Rivian

[cernjSHU]

Rivian is so over valued. Let's check back in 3 months and see where that stock price stands. My guess is under $70

I bought Tesla at $25 a share back in 2011. (Pre-split price). A couple years later it went to $120. I thought Tesla went to high and too fast and nothing could justify that price even though I loved what they were doing. So I sold it. That was one of the biggest mistakes I ever made. That initial stock purchase would be worth $1,6 million.
I did buy back in at $320(presplit) and rose a terrific rise since then.

I won’t be making that same mistake with Rivian. They make an extraordinary vehicle and has the backing of Amazon. There is no way Rivian is going to $70.

 

[Pirata]

well how exactly do you burn through BILLIONs of dollars? has any company ever done that before? i think its unprecedented.

It appears physical plant is eating up a lot of that.

They are touted as a Lean embracing organization.

They have 7,000 employees.

Ford has 186,000
Chrysler has 90,000
GM has 155,000
Tesla has 71,000

 

[SHUSA]

It appears physical plant is eating up a lot of that.

They are touted as Lean embracing organization.

They have 7,000employees.

Ford has 186,000
Chrysler has 90,000
GM has 155,000
Tesla has 71,000

Billion in losses. B. on a physical plant? a billion??

 

[Hallsome]

Billion in losses. B. on a physical plant? a billion??

I’m not saying you’re wrong on the outcome of this but I’m not sure you understand business losses in this sector

 

[SHUSA]

I’m not saying you’re wrong on the outcome of this but I’m not sure you understand business losses in this sector

id love if u could help me understand how a billion in losses could ever make sense.

why is this not worrisome to investors?

 

[cernjSHU]

id love if u could help me understand how a billion in losses could ever make sense.

why is this not worrisome to investors?

For the next decade Rivian will not pay a dime or very little in taxes as they write off all the gains from the billion loss, depreciation etc. Btw, Amazon did not experience a profit up until just recently.

 

[Pirata]

Billion in losses. B. on a physical plant? a billion??

EV Maker Rivian Plans to Spend $5 Billion on 10,000-Acre Plant

A company document proposing a colossal second factory, likely to be built in Arizona, reveals a $5 billion initial investment from Rivian, according to a report from Reuters.

www.caranddriver.com

Looks like the first one cost $750 million

$750 Million: Rivian's Investment At Normal Manufacturing Plant

Rivian watchers have known for over three years that the electric automaker planned to invest a lot of money into its Normal manufacturing plant. Now we…

www.wglt.org

Don't confuse an operating loss with actually losing money.

You need to also consider the balance sheet.

So for a simple example you take out a loan for a billion dollars and you buy a billion dollar plant.

You paid a billion dollars and claim no revenue and hence you have a billion dollar loss on operating income.

On the balance sheet you have a billion dollars in liabilities and a billion dollars in assets and so you are even.

For argument's sake let's say the following year you make $100 million in revenue and pay 25 million and have 25 million of other expenses.

You have a net 50 million dollar operating profit but you apply 50 million dollars of the lost carryover and you pay no taxes.

Obviously it's a little more complicated than that but as a simple example that's kind of how it works.

People unfamiliar with accounting might call this loopholes or might call it cooking the books but in reality it's just a normal part doing business and normal accounting practice.

You can't do this forever and at some point you do have to turn a profit. Looking at what I've read about Rivian they seem to be on track with the business plan that they floated to investors. As long as they stay on track with the business plan and keep the investors satisfied they are good to go.

 

[Pirata]

id love if u could help me understand how a billion in losses could ever make sense.

why is this not worrisome to investors?

The investors will be fine as long as Rivian sticks to their loss projections. If they start to exceed those projections then the investors will have issues. One thing is for sure is that the investors have Rivian under a microscope and getting continual updates on Rivian operations. When you're playing with this kind of money you need steel balls.

Years ago I bought a half million dollar property and operated at a loss for 3 years.

I then sold the property at an amount that covered my losses plus made some profit.

For the first three years I was able to claim losses on my taxes which helped with the cash flow.

At the time of the sale I was faced with either paying capital gains or deferring the tax on the gains by buying a larger property.

I chose to pay the gains but could have taken the second option and repeated the process. It's all about risk and reward. Had the value of the property going down I would have had a true loss. I took the risk and made out okay. There was no guarantee of that.

This is why you hear people like myself question how much the government should take out of the gains I make on this kind of a risk.

My perspective on capital gains is vastly different on somebody who has never invested in such a manner.

 

[Pirata]

A Guide to Your 1031 Exchange

www2.1031dst.com

 

[Merge]

So for a simple example you take out a loan for a billion dollars and you buy a billion.

You pay a billion dollars and claim no revenue and hence you have a billion dollar loss on operating income.

Just to clarify though, that billion you buy needs to be something that qualifies as an expense in the current year.

 

[Merge]

This is why you hear people like myself question how much the government should take out of the gains I make on this kind of a risk.

Personally, no issue with lower tax for that scenario, or even rolling it into something new. That is the tax law working as intended. Only issue is when people of significant means design their business plans in order to take advantage of those laws to do something other than what was intended.

I don't blame those people at all though. It is the law that needs to be reviewed to ensure they were designed properly.

 

[SHUSA]

Personally, no issue with lower tax for that scenario, or even rolling it into something new. That is the tax law working as intended. Only issue is when people of significant means design their business plans in order to take advantage of those laws to do something other than what was intended.

I don't blame those people at all though. It is the law that needs to be reviewed to ensure they were designed properly.

so im assuming you are bullish on rivian ipo

 

[Pirata]

Only issue is when people of significant means design their business plans in order to take advantage of those laws to do something other than what was intended.

I don't blame those people at all though. It is the law that needs to be reviewed to ensure they were designed properly.

I'm assuming your second paragraph is what you meant in the first place.

Designing a business plan around tax laws is perfectly reasonable.

I've done it with real estate. Leverage the buy, leverage the the interest payments. No money out of pocket. Apply the max allowable losses against income for net positive cash flow. There's risk, but that's my decision.

The piece everyone leaves out is that the tax laws encourage me do this and in doing so I support the wages paid to carpenters, plumbers, etc, and the income taxes those workers pay to government. I participate in turning a empty field into income for others and tax revenue for local, state, and federal governments.

What is wrong with that?

 

[Merge]

so im assuming you are bullish on rivian ipo

I personally feel they are way over valued for today, but their valuation is speculate for 3-4 years down the line. I’m bullish on their partnership with amazon and them trying to capture part of the commercial lines.

 

[Merge]

I'm assuming your second paragraph is what you meant in the first place.

Designing a business plan around tax laws is perfectly reasonable.

I've done it with real estate. Leverage the buy, leverage the the interest payments. No money out of pocket. Apply the max allowable losses against income for net positive cash flow. There's risk, but that's my decision.

The piece everyone leaves out is that the tax laws encourage me do this and in doing so I support the wages paid to carpenters, plumbers, etc, and the income taxes those workers pay to government. I participate in turning a empty field into income for others and tax revenue for local, state, and federal governments.

What is wrong with that?

Nothing wrong with that at all. Like I said, that is exactly as intended. You are taking on risk and providing a benefit to the economy.

There are some who do not operate in that way, and are able to build massive amounts of wealth, are not contributing to creating jobs and don't need to ever pay taxes. I think that's wrong.

 

[Pirata]

There are some who do not operate in that way, and are able to build massive amounts of wealth, are not contributing to creating jobs and don't need to ever pay taxes.

I'd love to see that list. 😀

 

[SHUSA]

Rivian battery power degrades about 60% when towing. not sure if that matters as i believe most buyers wont tow anything anyway.

anyone heard about Canoo? Is this serious?

Electric Cars, Fleet, Pickup Trucks for Clean Energy

Canoo is engineering electric vehicles and leading the automotive world's transition to clean and sustainable energy.

www.canoo.com

 

[cernjSHU]

Rivian battery power degrades about 60% when towing. not sure if that matters as i believe most buyers wont tow anything anyway.

anyone heard about Canoo? Is this serious?

Electric Cars, Fleet, Pickup Trucks for Clean Energy

Canoo is engineering electric vehicles and leading the automotive world's transition to clean and sustainable energy.

www.canoo.com

It’s a factor. Rivian claimed that towing would degrade 50% of range. Fairly close. Still gives you like 130 miles of towing before a recharge.

 

[SHallguy2]

Yes Canoo trades under symbol GOEV. I bought stock in GOEV, which is lesser known but has 3 very cool vehicles including a delivery truck. Minivan for sale in 2022. Going to be a $100 stock, currently trading at around $12. I'm considering a down payment now on one of their vehicles.
Heavily shorted but just starting to move in the last few weeks. Check out the warrants GOEVW, great investment with less risk. You can thanked me later.

 

[SHUSA]

Yes Canoo trades under symbol GOEV. I bought stock in GOEV, which is lesser known but has 3 very cool vehicles including a delivery truck. Minivan for sale in 2022. Going to be a $100 stock, currently trading at around $12. I'm considering a down payment now on one of their vehicles.
Heavily shorted but just starting to move in the last few weeks. Check out the warrants GOEVW, great investment with less risk. You can thanked me later.

it looks like a fake company lol. their style is also extremely boxy.

 

[SHallguy2]

The adventure vehicle is very futuristic. Back seat is very different and great cargo space. The website does look almost fake, but they are for real. Good stock to watch in the coming weeks.

 

[cernjSHU]

Yes Canoo trades under symbol GOEV. I bought stock in GOEV, which is lesser known but has 3 very cool vehicles including a delivery truck. Minivan for sale in 2022. Going to be a $100 stock, currently trading at around $12. I'm considering a down payment now on one of their vehicles.
Heavily shorted but just starting to move in the last few weeks. Check out the warrants GOEVW, great investment with less risk. You can thanked me later.

I think it is an interesting take at electric vehicles. It is a bit too futuristic and bare bones for my tastes. Why Tesla is successful is because their vehicles are beautiful. I can't say the same here. But, they are looking to come into the market at a very low price. I don't think they will have a market in an everyday vehicle but perhaps their delivery vans can get traction due to their low cost. I have invested in Tesla, Rivian and Lucid. I don't love this, so I am staying out. Good luck with it. Hope it makes it.

 

[sami]

There are plenty that will make it, and more so that will fail. Tough to predict, but wary of companies with a website and an idea and not capital and production.

I know nothing about the company so not saying it’ll flop, just that more will fail than succeed.

 

[SHUSA]

I think it is an interesting take at electric vehicles. It is a bit too futuristic and bare bones for my tastes. Why Tesla is successful is because their vehicles are beautiful. I can't say the same here. But, they are looking to come into the market at a very low price. I don't think they will have a market in an everyday vehicle but perhaps their delivery vans can get traction due to their low cost. I have invested in Tesla, Rivian and Lucid. I don't love this, so I am staying out. Good luck with it. Hope it makes it.

theoretically they all make sense to throw a few hundred bucks in.

but that canoo one screamed fraud to me

@SHallguy2 anynother info on canoo? are they actually producing cars? or just another VC pyramid scheme?

 

[SHUSA]

EdisonFuture is another one i see that looks sleek but dont know if its legit or not. looks like its china owned

 

[cernjSHU]

EdisonFuture is another one i see that looks sleek but dont know if its legit or not. looks like its china owned

You were anti-Rivian calling it ugly and not understanding how anyone could invest in these companies. Now you are looking at companies that post artist renditions on their website. I don't get your views on these companies.

 

[SHUSA]

You were anti-Rivian calling it ugly and not understanding how anyone could invest in these companies. Now you are looking at companies that post artist renditions on their website. I don't get your views on these companies.

i never said i dont understand how anyone could invest in these companies in general. i was trying to understand what the advantages for rivian were despite them taking a billion loss.

im unsure what u dont get. everyone has different insight and opinions to these EV companies and its interesting to talk about.

there are other contenders in the market now that seem fugazi which is super strange for the auto industry. its a new time. sounds like some on the board are willing to go in on some of the more suspect ones. there was never really startup combustion auto companies.

btw i still personally dont like the way rivian looks, doesnt mean others will feel the same.

 

[cernjSHU]

You certainly did say you didn’t understand how people could invest in Rivian. Now you are saying invest a little in all EV companies. That’s actually not a good investing strategy. I’m not bashing you. I am trying to explain that this shifting view can result in big time losses in the market because you missed The other three and are chasing it. Btw, you haven’t missed on Lucid and Rivian - yet.

I have invested in three EV companies that I think are winners due to their superior performance and looks. Invest in what you love. I have followed that investing philosophy for over 20 years now. It hasn’t let me down even though it may contradict so called traditional investing advice.

 

[SHUSA]

You certainly did say you didn’t understand how people could invest in Rivian. Now you are saying invest a little in all EV companies. That’s actually not a good investing strategy. I’m not bashing you. I am trying to explain that this shifting view can result in big time losses in the market because you missed The other three and are chasing it. Btw, you haven’t missed on Lucid and Rivian - yet.

I have invested in three EV companies that I think are winners due to their superior performance and looks. Invest in what you love. I have followed that investing philosophy for over 20 years now. It hasn’t let me down even though it may contradict so called traditional investing advice.

i was trying to understand. by posing certain questions and poking at different holes. EV vehicles are obviously the future. but which ones, and why one that lost a billion before selling anything. throwing a few hundred isnt investing big. like throwing play money in crypto at the early onset even 100 could have paid out big. obviously not to that scale, as these are hard and proven products. but $100 in tesla for funsies turned into a car or house for some.

so you invest based on performance and looks. those two vehicles arent even out yet so im not sure how they hit the performance button for you.

does the ability to actually produce a car factor in? that seems to be the big issue.

 

[cernjSHU]

i was trying to understand. by posing certain questions and poking at different holes. EV vehicles are obviously the future. but which ones, and why one that lost a billion before selling anything. throwing a few hundred isnt investing big. like throwing play money in crypto at the early onset even 100 could have paid out big. obviously not to that scale, as these are hard and proven products. but $100 in tesla for funsies turned into a car or house for some.

so you invest based on performance and looks. those two vehicles arent even out yet so im not sure how they hit the performance button for you.

does the ability to actually produce a car factor in? that seems to be the big issue.

Rivian has pick ups on the road already and have been road tested with rave reviews prior to the IPO. With regard to Lucid, I invested seeing what the car looked like and the fact that Tesla's former chief engineer of the Model S is the CEO of the company. Fast forward, Lucid has been named AutoTrend's car of the year with an over 500 mile range. https://www.motortrend.com/news/lucid-air-2022-car-of-the-year/

No investment is too small for not investing seriously. The power of time in compounding interest is what young people need to know and why the earlier they invest, the better.

 

[Pirata]

and why one that lost a billion before selling anything

I don't think the investors would call it "lost a billion"

Have you ever bought a house?

Say you pay $300K for a house. Do you run around telling your friends that you lost $300K?

 

[SHUSA]

I don't think the investors would call it "lost a billion"

Have you ever bought a house?

Say you pay $300K for a house. Do you run around telling your friends that you lost $300K?

some people might say that for their house haha. everyone says it for a boat.

to clarify, i meamt burned through a billion without any sales.

i mean, if the pros overcome that it must be pretty interesting to you guys

 

[cernjSHU]

some people might say that for their house haha. everyone says it for a boat.

to clarify, i meamt burned through a billion without any sales.

i mean, if the pros overcome that it must be pretty interesting to you guys

You are still looking it at it wrong. That billion is investing. They had research and development expenses, factory machinery ,labor costs. That billion is not burned. That billion is an investment for growth. That billion will now return a great profit. It’s already worth 100 billion.

 

[Merge]

You are still looking it at it wrong. That billion is investing. They had research and development expenses, factory machinery ,labor costs. That billion is not burned. That billion is an investment for growth. That billion will now return a great profit. It’s already worth 100 billion.

That much R&D which would be less convincing without their partnerships with Amazon.
Amazon promising a purchase of 100k vans is huge.

 

[SHUSA]

You are still looking it at it wrong. That billion is investing. They had research and development expenses, factory machinery ,labor costs. That billion is not burned. That billion is an investment for growth. That billion will now return a great profit. It’s already worth 100 billion.

if the govt were to invest $1 billion what would u say?

there lies the risk i suppose. what are they doing with it. investing is pretty vague.

agree the amazon thing is the one reason why ive been looking at the stock price. i go the way amazon, apple goes etc

 

[SHUSA]

woof. rivian taking a hit. amazon making partnerships for adjacent companies in same industry

 

[anon_ezos2e9wn1ob0]

Down to 85.

 

[cernjSHU]

Down to 85.

You are getting close to your prediction. Companies like this always have severe swings. However, this looks like a huge buying opportunity. This is a huge overreaction to amazon going to buy some unknown amount of electric vans from another company. Also, all of tech is taking a hit right now. Seems like there is a rotation out of tech into some other area. All temporary. I am a long-term investor and ride the waves of i going up and down. Buy the dips.

 

[shu09]

Hedge funds making big moves this week.

 

[anon_ezos2e9wn1ob0]

You are getting close to your prediction. Companies like this always have severe swings. However, this looks like a huge buying opportunity. This is a huge overreaction to amazon going to buy some unknown amount of electric vans from another company. Also, all of tech is taking a hit right now. Seems like there is a rotation out of tech into some other area. All temporary. I am a long-term investor and ride the waves of i going up and down. Buy the dips.

I think your long term approach is smart. I just believe these techs are way overvalued short term.