Electric vehicle maker Rivian $100B valuation despite almost no sales
cbc.ca
cbc.ca
> "Despite the popularity of the electric vehicle market and huge gains in Tesla's stock, we think investors should avoid the temptation to buy Rivian shares," investment research firm New Constructs said of the company ahead of the IPO.
> The firm notes that when Tesla went public in 2010, it was valued at $1.7 billion US, was at least already delivering vehicles to paying customers, and was on track to sell 1,500 vehicles that first year. That's more than Rivian says it will do, despite now being worth about 50 times what Tesla was worth then.
> "To buy the stock at such a high price before the company has shown it can consistently produce more than a handful of cars seems ridiculous to us," New Constructs said. "Investors shouldn't buy a stock just because it's in a hot sector."
Rivian might very well prove to be a horrible investment at current prices. It would certainly impossible to justify its valuation in a sane, "normal" market. But the market hasn't been normal for over a decade and just keeps getting less and less sane.
Is there really any point in trying to warn people about valuations anymore? As far as the market is concerned, we're basically living in a post-logic, post-sanity world and sadly, investors who stick to logic and sanity are going to miss out on most of the gains.
Of course, if and when the bubble pops, a lot of people will lose money but that doesn't mean that the logic and sanity folks will profit because, well, you'd have to be insane to be heavy short almost anything in this market.
No we don't. Good decisions win out in the end. People said Tesla was a bubble for 10+ years. And every couple years they justify the valuation they had a few years before. Tesla wasn't a crazy stock in 2018 given what we know now about what has happened since then. Maybe that is different now but some companies do grow into their valuations. Other companies, like Nikola Motors was all scam. Many people lost money betting in Nikola and many made money with shorts.
Some companies make it some don't, just saying 'the world is irrational' therefore never tell anybody anything is irrational is borderline an insane state of mind.
Those people that called out for Nikola having no rational bases for their stock price were actually right. Plenty of people still lost money because it wasn't right in the correct timeframe.
> Of course, if and when the bubble pops, a lot of people will lose money but that doesn't mean that the logic and sanity folks will profit because, well, you'd have to be insane to be heavy short almost anything in this market.
How about instead of going 'short' invest in companies with good fundamentals that have a high chance of making it threw troubling times. Just because you think something is overvalued doesn't mean the right thing it to go short. Short term investing is always gambling.
And in the longer term things actually look much more rational then obsessing over all these short term swings. If I buy stocks I plan to held them for years because its companies that I think have good fundamentals.
If you think the whole stock market and the whole economy is fundamentally overvalled, then go get invested in gold, not shorts.
Just saying the world is irrational and actual smart people will not make gains is kind of self-pitting. In fact the actual smart people who do make the right long term choices do make money.
> But the market hasn't been normal for over a decade and just keeps getting less and less sane.
And a decade ago people said it has gone crazy in the decade before. Rinse and repeat for literally ever since market existed.
At the current rate of money printing and low interest rates it seems like the goal is to keep pumping the bubble... so yeah, it's gonna take a while for the bubble to pop and in the meantime more gains to be made.
The question will be, what will the world look like then.