People seem to love the truck but hate the stock. Bring up this stock to a casual investor and watch the look of disdain cross his face. He’s been burned. I mean, for the most part, it’s just gone down. I obsess over this stock, for good reason. I own over 40k shares. I’ve been “burned”. But I just kept chasing and happy to do so. I’m not a bag holder. My average is 21 and there are no other companies on the public markets I’d rather own. Here’s my thesis:
My background is in business. I’ve started, bought, sold and invested in private company’s . Mid size, 50-100 employees. Not entirely relevant to investing in public stocks, but it is to gauging a management team’s effectiveness and intent.
The CEO, RJ, is an MIT engineer. He is disciplined, effective and focused. He’s also the founder.The CFO, Claire, is impressive also. She just did a 40 minute interview. It’s worth a watch.
Reasons people say not to buy:
Reasons 1-3: No profit/future dilution/debt
Scale and optimizations will lead to gross profitability in 2024. Net profit is further out. Van is at gross profit already. Announcements for new van contracts will be made after holidays. Who will it be? You are about to start seeing even more Rivians on the road. Maybe net profit in 2025/6. Meaningful profit will come after GA plant is built. BTW, the scale and size of this plant.
So, in the next couple years how are we going to survive? We’ll have to raise. Why deny it? What an investor should do is look at how previous raises were done and ignore how the stock responded. The GA plant deal with the state of GA was a solid deal for both the State and RIVN. And we get a monstrous, state of the art plant. 🇺🇸🇺🇸
The raise before that, to sustain operations, was executive artistry and the stock was destroyed. No dilution until 2030 at $23 a share and locked in 3% interest.
I trust management to perform their next raise in a way that protects shareholders. And history gives me no reason to believe other wise.
Reason 4-6:
Demand/higher interest rates/economy
RJ says plainly demand is not a problem. Can we back up the statement? No paid ads while every other company is buying ad space, even though apparently Amazon is now advertising us for free on Thursday night football. Increased prices while everyone else lowering prices. Increased deliveries from estimated 50 to 54k deliveries. 84k deliveries planned for next year will be gravy. After that, Georgias on our mind and we’ll have more models/more optimizations and more scale leading to more profit.
Reason 7->
The stock is shit:
I can’t argue that, that’s why I’ve made money buying puts. It’s not shit anymore.
Submitted December 08, 2023 at 05:17AM by behrific https://ift.tt/C6mOgt1
