Rivian's Stock Has Already Had a Wild Week, but the Story Hasn't Changed - Latest Global News

Rivian’s Stock Has Already Had a Wild Week, but the Story Hasn’t Changed

Shares of the electric vehicle (EV) maker. Rivian Automotive (NASDAQ:RIVN) fell on Wednesday after rising earlier in the week on a brief resurgence in interest in meme stocks. At the close, Rivian was down about 8.9% from Tuesday’s closing price — but still up about 2% since the end of last week.

The resurgence in meme stocks faded on Wednesday

For followers of, it’s been a whole week Meme stocks — the group of heavily shorted stocks that surged earlier this decade after aggressive promotion by social media personalities and others hoping to cause short squeezes.

The group experienced a brief revival on Monday and Tuesday after one Reddit User who rose to prominence in the early heats, which were posted on social media for the first time in about three years.

Rivian, like many others EV companies, had a moment as a meme stock. There was a huge rush shortly after the automaker’s IPO In late 2021, Rivian – which had just started producing its first vehicle – briefly reached a market cap of more than $100 billion.

Rivian is out of the hype phase and into the rut

A lot has changed since then. While Rivian is now an established electric vehicle brand and has shipped about 100,000 vehicles, its $10.2 billion market cap is just a fraction of what it was at its peak.

Why? Many reasons. Below: Reality has taken hold. Rivian isn’t close to sustainable profitability yet, and getting there will be a costly task.

Rivian is currently completing development of the first vehicle on its new, smaller and more cost-effective platform. The company has told investors that it expects to begin production of this vehicle, the R2 SUV, in the first half of 2026.

Rivian’s path to profitability is clear – it’s just a long one

There’s a good chance that the $45,000 R2 — and the even smaller R3 that will follow — will be the vehicles that give Rivian the scale it needs to become profitable in the long term. And we should note that Rivian isn’t in any immediate danger of going bankrupt: the company recently confirmed that it has enough cash to put the R2 into production and is working hard to reduce its costs in the meantime .

CEO RJ Scaringe and his team do almost everything right. But Rivian investors waiting for a real return to rocket-like share price growth will likely have to wait at least a few more years.

Should you invest $1,000 in Rivian Automotive now?

Before you buy Rivian Automotive stock, consider the following:

The Motley Fool Stock Advisor The analyst team has just identified what they think this is The 10 best stocks so investors can buy it now… and Rivian Automotive wasn’t one of them. The ten stocks that made the cut could deliver huge returns in the years to come.

Think about when Nvidia created this list on April 15, 2005… if you have $1,000 invested at the time of our recommendation, You would have $559,743!*

Stock Advisor provides investors with an easy-to-understand roadmap to success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks per month. The Stock Advisor has service more than quadrupled the return of the S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns from May 13, 2024

John Rosevear has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Rivian Stock Already Had a Wild Week, but the Story Hasn’t Changed was originally published by The Motley Fool

Sharing Is Caring:

Leave a Comment