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It just doesn’t make any sense in the context that the stock market is supposed to be efficient. This kind of “going public” setup seems ridiculous. It’s like

It just doesn’t make any sense in the context that the stock market is supposed to be efficient. This kind of “going public” setup seems ridiculous. It’s like there’s a room behind the curtain with some kind of money laundering or backhanded deals being brokered and the company itself is just a ‘front’ to look busy.

lastofthemojito 5y ago
The stock market is theoretically supposed to be efficient, but these days plenty of individual investors are about "the mission" of companies like Tesla, throwing money at shares regardless of any fundamental analysis. I'd imagine Rivian will attract plenty of similar investors, and it'd be kind of silly for Rivian not to take advantage of that opportunity to raise easy money.
- ianai 5y ago
  Agree. There’s so much money floating around that companies can be brought public with essentially all future possible growth priced into the offering at a very high success. It’s as though everyone assumes every bet is going to come out the most profitable way. No room for error nor even learning process in the valuation.
  - l33tbro 5y ago
    Why do you think it is? I feel like investors are pretty smart and surely understand that these companies are not worth all this. I see what you mean about money floating around. But does it ever reach a point where there is a common sense counter-weight that maybe the latest pets.com is not worth the GDP of a small country.
    - ytdytvhxgydvhh 5y ago
      I know a couple that retired to Miami recently. They know that climate change is real. They think Miami will be decimated by rising oceans at some point. They just don’t think it’ll be while they’re still around, so what do they care? I think Tesla’s stock is overvalued but I’ve momentum traded it a couple of times (especially when Elon’s tweets seem upbeat a couple of days before earnings are announced). Sure I think I’m buying at inflated prices but I’m guessing I can sell at even more inflated prices.
      - l33tbro 5y ago
        > They just don’t think it’ll be while they’re still around, so what do they care? Ah yes .. the oblivion>reality optimisation the modern world has been gifted. Never ceases to create interesting use cases. You're smarter than me with trading/finance. I cannot educe much sense from any of it these days - and don't have the kahunas to trade on vibe. Weirdly, my only finance buddy (buys shares for super companies) actually cautiously observes a company's history and their management before investing in stocks. Maybe that'll become the move again once the asset bubble collpases.
Seanambers 5y ago
The car market is quite a interesting place nowadays, according to the old lore - the streets would be filled with Tesla killers long ago and Tesla would if possible be bankrupt several times over by now. -This was the general market sentiment only 3-4 years ago, and had at that time prevailed for quite some time. With the latest estimated Q3 production numbers for Tesla they will now have a 1 million annualized rate of car production and it will be growing annually at around 50% for many years to come. (FYI : The numbers came out, real number is 950' annualized.) I'm sure there is a place for Rivian if they can execute,- I will not argue that the price of Rivian is right, but I would interject that the marketplace is shifting and dramatically so. The most reasonable argument is that the stock market does not view the automotive incumbents as competitive against new electric car companies and this shows in the valuation. The old auto companies have not innovated, and now they are being out innovated. Their market share are in free fall and there is a lot of possibility for startups to grab a share of the market. Here's the latest from Germany; Translated quote from VW Brand CEO Ralf Brandstätter; 'It is urgently necessary that a new course is set in Wolfsburg. Future competition with Tesla's new Gigafactory will be brutal. The electric car pioneer sets new standards in car production.. ..For example, a Model 3 is built in 10 hours, more than 3 times as fast as a VW ID.3 in Zwickau. This puts Tesla in another dimension in terms of productivity and profitability' (The ID series of cars were the supposedly Tesla Killers from VW) From ; https://www.businessinsider.de/wirtschaft/kampf-gegen-gruenheide-vw-chefs-wollen-wolfsburger-stammwerk-radikal-umbauen-um-gegen-tesla-und-china-cars-zu-bestehen-a/ https://www.businessinsider.de/wirtschaft/kampf-gegen-gruenh... some more context; https://twitter.com/alex_avoigt/status/1443993103329857549 https://twitter.com/alex_avoigt/status/1443993103329857549
- paganel 5y ago
  > For example, a Model 3 is built in 10 hours, more than 3 times as fast as a VW ID.3 in Zwickau. That would explain the panel gaps. On a more serious note, where I think Tesla is way above the other (old) manufacturers is in software, the Germans especially have treated the software as something extrinsic to building a car until now (for good reason, given the circumstances) but this has changed once EVs came into play, you have to have top-notch software developers and top-notch software execution in order to get everything out of a car battery.

lastofthemojito 5y ago

The stock market is theoretically supposed to be efficient, but these days plenty of individual investors are about "the mission" of companies like Tesla, throwing money at shares regardless of any fundamental analysis. I'd imagine Rivian will attract plenty of similar investors, and it'd be kind of silly for Rivian not to take advantage of that opportunity to raise easy money.

ianai 5y ago
Agree. There’s so much money floating around that companies can be brought public with essentially all future possible growth priced into the offering at a very high success. It’s as though everyone assumes every bet is going to come out the most profitable way. No room for error nor even learning process in the valuation.
- l33tbro 5y ago
  Why do you think it is? I feel like investors are pretty smart and surely understand that these companies are not worth all this. I see what you mean about money floating around. But does it ever reach a point where there is a common sense counter-weight that maybe the latest pets.com is not worth the GDP of a small country.
  - ytdytvhxgydvhh 5y ago
    I know a couple that retired to Miami recently. They know that climate change is real. They think Miami will be decimated by rising oceans at some point. They just don’t think it’ll be while they’re still around, so what do they care? I think Tesla’s stock is overvalued but I’ve momentum traded it a couple of times (especially when Elon’s tweets seem upbeat a couple of days before earnings are announced). Sure I think I’m buying at inflated prices but I’m guessing I can sell at even more inflated prices.
    - l33tbro 5y ago
      > They just don’t think it’ll be while they’re still around, so what do they care? Ah yes .. the oblivion>reality optimisation the modern world has been gifted. Never ceases to create interesting use cases. You're smarter than me with trading/finance. I cannot educe much sense from any of it these days - and don't have the kahunas to trade on vibe. Weirdly, my only finance buddy (buys shares for super companies) actually cautiously observes a company's history and their management before investing in stocks. Maybe that'll become the move again once the asset bubble collpases.

Seanambers 5y ago

The car market is quite a interesting place nowadays, according to the old lore - the streets would be filled with Tesla killers long ago and Tesla would if possible be bankrupt several times over by now. -This was the general market sentiment only 3-4 years ago, and had at that time prevailed for quite some time. With the latest estimated Q3 production numbers for Tesla they will now have a 1 million annualized rate of car production and it will be growing annually at around 50% for many years to come. (FYI : The numbers came out, real number is 950' annualized.) I'm sure there is a place for Rivian if they can execute,- I will not argue that the price of Rivian is right, but I would interject that the marketplace is shifting and dramatically so. The most reasonable argument is that the stock market does not view the automotive incumbents as competitive against new electric car companies and this shows in the valuation. The old auto companies have not innovated, and now they are being out innovated. Their market share are in free fall and there is a lot of possibility for startups to grab a share of the market. Here's the latest from Germany; Translated quote from VW Brand CEO Ralf Brandstätter; 'It is urgently necessary that a new course is set in Wolfsburg. Future competition with Tesla's new Gigafactory will be brutal. The electric car pioneer sets new standards in car production.. ..For example, a Model 3 is built in 10 hours, more than 3 times as fast as a VW ID.3 in Zwickau. This puts Tesla in another dimension in terms of productivity and profitability' (The ID series of cars were the supposedly Tesla Killers from VW) From ; https://www.businessinsider.de/wirtschaft/kampf-gegen-gruenheide-vw-chefs-wollen-wolfsburger-stammwerk-radikal-umbauen-um-gegen-tesla-und-china-cars-zu-bestehen-a/ https://www.businessinsider.de/wirtschaft/kampf-gegen-gruenh... some more context; https://twitter.com/alex_avoigt/status/1443993103329857549 https://twitter.com/alex_avoigt/status/1443993103329857549

paganel 5y ago
> For example, a Model 3 is built in 10 hours, more than 3 times as fast as a VW ID.3 in Zwickau. That would explain the panel gaps. On a more serious note, where I think Tesla is way above the other (old) manufacturers is in software, the Germans especially have treated the software as something extrinsic to building a car until now (for good reason, given the circumstances) but this has changed once EVs came into play, you have to have top-notch software developers and top-notch software execution in order to get everything out of a car battery.