The Spectacular Failure of Rivian Stock.

Rivian peaked in 2021 at a market cap of $150B. Today, that market cap is 10x less. How did one of America's most hyped IPOs end in such disaster, and is there any hope of avoiding bankruptcy?

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★ ★ CONTENTS ★ ★
0:00 Rivian's Fall from Grace
1:12 The Eye Watering IPO
4:30 Rivian's Financial Results
6:48 Hamish Explains the Cash Burn
7:17 Will Rivian Go Bankrupt?
8:50 Rivian's Big Lifeline
10:50 The Valuation Situation

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[NewMoneyYouTube]

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[weho_brian]

90% of Rivian investors have never actually looked at the balance sheet

[nolo]

and the stock goes from $11 to $18 as soon as this is published lmao

[DerekHardwick]

At some point a few years ago, tech companies (including EV makers) figured out it's easier to sell things to investors than it is to sell things to customers. Just create hype with mockups, prototypes, and of course communications materials. If you actually make things in the real world you have a harder challenge, but your hype machine will probably sell more products than you have, and there's no need for them to cost less than they sell for, as your goal isn't to make money from the customers anyway.

"This is fine" vibes for the initial VCs and management since they can (at least partially) cash out when selling to normal investors, and the VC managers can always claim a win even if their customers didn't make money because, well, look at the hype, it could have.

[farzanjavaher]

People don't realize just how much money car manufacturing and design requires.

Its typical for a new car to cost an established company several billion. Now factor in all new facilities, factories, marketing a new brand, R&D of new vehicles and its not hard to see why they burn through so much cash.

[blackdave]

10:38 The light at the end of a tunnel could also be an oncoming train

[micmousebg]

Amazon was losing money in their first 20 years! Rivian is making great cars and I hope they make it!

[pondopondo]

I think if cars are good eventually it would level out but cash burning need to die down quite a bit. When I just think of human ingenuity and engineering prowess needed to build Rivian it's actually quite impressive. Despite challenges I'm rooting for the company.

[billpole]

Nice video, Brandon!

I'm a RVN shareholder, as part of a diversified portfolio of mainly global and tech ETFs, and some individual stock picks. I got into Rivian deliberately late; I hold about 40 shares at an average price of $17.43. I'm down 7% including the foreign exchange impact (I'm based in Spain and buy in Euros). For me it's a waiting game at this price, but I feel sorry for those who got in on the early hype. You're right, $150bn was crazy, but it was just another example of post-Covid financial madness.

Keep up the good work! 😎👍🏻

[nealioable]

You should really do a video comparing 2016 Tesla to current Rivian. I’ve been holding Tesla since 2014 and recently bought Rivian at $11 this year. After following Tesla’s story for a decade this story is eerily similar. Two years out from their mass market vehicle launch, retooling manufacturing while keeping production steady, securing cash to fund the expansion, it is straight out of Tesla’s playbook from 2016. It was all doom and gloom for Tesla back then, but if you took the bait you missed out on a gigantic gain.

The catchy headline sells clicks, but this really isn’t paying attention to the positive indicators at all.

[matu]

I like these newer videos where old content doesn't get rehashed, thanks for listening.

[chrisshorman]

I still don't get why VW would drop that much cash for software access. That's a lot of dough.

[freedomstripe]

It’s not just EVs. All car manufacturers are struggling right now and it’s due to high interest rates. 80% of all car purchases are financed and there are few people that want to pay double digit rates when buying a new car

[crAZNimal]

i remember Telsa was in the same position a decade ago, burning cash, no profit, and even went to apple with an offer to buy the company

[kkiller]

The big mistake people made was thinking Rivian was the new Tesla. Tesla is the new Tesla. Rivian has many many things missing that Tesla had from day one, which was 16 years ago...

[ricardosousa]

VW didnt invest in Rivian to help them, they paid to bankrupt them and keep some of the patents. Although it seems like short term it will help them, it really wont, as now they have to comply with deadlines to get the rest of the money from VW, while still delivering the amazon order, which they are failing already. Its a shame because they do have good cars, but product =/= company.

[JJNickel]

About a decade ago, a put a few hundred dollars of Tesla stock in my roth ira. I had had to pull it all out when I lost my job and had bills to pay. Today that Tesla stock would be just shy of $50, 000.

I let FOMO impact my decision to buy $1, 000 worth of Rivian shares during the IPO. Thats the lesson Rivian taught me. Never letting FOMO impact my logic again.

[christophercrock]

Car manufacturing needs to achieve scale to become profitable. If you reach this scale, it means your product has been fully adopted by the market. Investors are betting that Rivian will reach this scale soon, rather than focusing on immediate profitability.

[Jennyuk]

Honestly, this concerns me and has left me uneasy. Especially this potential depression, no more a recession. I'm unsure about my $130K account strategy, considering the uncertainty of this whole recession mostly.

[bougieproletariat]

Ev's need swappable batteries because that removes the burden of both long charge times and degrading batteries