The Rivian Curse

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Rivian's (RIVN) recent stock performance may have burned a hole in many a retail investor's portfolio. It's also burned a big hole in Ford (F), and now Amazon's, quarterly performance.

Last night in its first quarter earnings report, Amazon (AMZN) revealed it booked a $7.6 billion mark-to-market loss on its investment in Rivian, which led to an overall $3.8 billion net loss for the quarter. Amazon owns an 18% stake in the electric vehicle maker.

Earlier this week, Ford reported an overall $3.1 billion loss for the first quarter, due to its mark-to-market loss of $5.4 billion on its Rivian investment. Ford has a 12% stake in Rivian.

Amazon has additional problems:

Amazon, America’s second-largest private employer, hired roughly 780,000 people over the past two years, bringing its workforce to 1.62 million. It also raised wages, paid out bonuses for new hires and was willing to send out half-empty vans to ensure customers got their packages on time.

The costs piled up, with Amazon reporting $112.7 billion in total operating expenses, including $20.3 billion in fulfillment outlays during the quarter ended March 31. In an attempt to blunt the impact of inflationary pressure, the company on Thursday began levying a first-ever 5% fee on independent sellers who use its shipping services. Prime members in the U.S. will spend $20 more a year for speedy shipping and other benefits such as the company’s streaming service.

Amazon was overstaffed for much of the first quarter, Olsavsky said, which in the company’s warehouses means workers sitting idle or managers asking for volunteers to go home without pay.

The company reported a net loss of $3.8 billion, or $7.56 a share, compared with profit of $8.1 billion, or $15.79 a share, in the period a year ago. Amazon said it included a loss of $7.6 billion in non-operating expense from its investment in electric carmaker Rivian Automotive Inc. It was the company’s first net loss in seven years.
 
I have had a neighbor actually took delivery of a Rivian pickup. Also-Motor Trend did a feature article where the trucks did a 7,700 miles mostly off road cross-country.

Also-one towed across the country-
 
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Not really an electric vehicle discussion - we have linked articles on stock prices, and consumer sentiment, the vehicle is only tangential to the topic.
 
no bashing needed.
just list the expense to swap 133kWh packs.
I will assume $22k before labor charges, 1/3rd more than a Tesla standard 85kWh.
 
Not really an electric vehicle discussion - we have linked articles on stock prices, and consumer sentiment, the vehicle is only tangential to the topic.
Yea- I thought about that but ultimately one of the points of the discussion would entail if said product is viable. Product is viable-the execution and/or running of the company is poor.
 
Tesla just now is turning a profit after 15 years of major subsidies and forced "carbon offset " nonsense credits.
 
What was Amazon’s thinking. They have enough to worry about. Were they thinking they would get an inside deal if they need to electrify their fleet?
Rivian is in business solely to collect investment dollars, for years their only income was collecting cash from vw to store dieselgate cars, their employees and “talent “ never seemed right and far from Tesla like.
Their product is made solely for curb appeal ignoring fundamental costs and limitations

I don’t see them being around for long, give it 5 years or less, reliability and other metrics will start to get coaxed out possibly after they are completely gone
 
Rivian is in business solely to collect investment dollars, for years their only income was collecting cash from vw to store dieselgate cars, their employees and “talent “ never seemed right and far from Tesla like.
Their product is made solely for curb appeal ignoring fundamental costs and limitations

I don’t see them being around for long, give it 5 years or less, reliability and other metrics will start to get coaxed out possibly after they are completely gone
What a nightmare for the owners in 10 years. Hope they make enough spare parts like DMC if they have a following anyway
 
What was Amazon’s thinking. They have enough to worry about. Were they thinking they would get an inside deal if they need to electrify their fleet?
I remember one phrase Uncle Jeff used to say, something like "If you feel smarter when your stock went up that day, do you feel stupider when your stock went down the next day", when asked about stock prices.

It is all about long term and to be honest, when you invest in a fast moving volatile startup, this kind of ups and downs are expected.

Anyways, Jeff is used to big investment for long term, in small increment. They also brought Zoox and kept it private, and most likely the long term game is to get some sort of electrified or driverless delivery going, and they don't want to be the only tech giant left out with no patents to sue for a stake in the future. Apple is the same, I don't ever see them building a car but they want patents to cross license with each other.

Blue Origin however, I do not see it being a success in the long term. Jeff is too management and investment focused and I don't think he is going to do well with rockets.
 
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Rivian is in business solely to collect investment dollars, for years their only income was collecting cash from vw to store dieselgate cars, their employees and “talent “ never seemed right and far from Tesla like.
Their product is made solely for curb appeal ignoring fundamental costs and limitations

I don’t see them being around for long, give it 5 years or less, reliability and other metrics will start to get coaxed out possibly after they are completely gone
I do think they will survive, but their investment spent today may not. If anything they may end up acquired as a division of some other major company and they will likely focus on powertrain and let the other part of another company deal with the rest of the business.

People I know who went to work there seem to know their stuff, and they do jump around between there and Tesla (maybe the Tesla B team, I don't know). It is probably going to be an OK truck if you know what you are buying, but don't expect it to be a Corolla.

Stock price collapse after the lockup period end after IPO is pretty common. I remember I used to think FB is doomed when the stock price dropped back then, from like 60 to 40 a share, or something like that.
 
A coworker of my wife just took delivery of a Rivian. Very impressive machine. Quick. Long range.

Not cheap.
 
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