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Can someone smarter than me explain how this is happening? If it has this market cap, someone is buying at that valuation. Why? Greater fool theory?

Swizec 5y ago
“omg I wish I had bought Tesla early”
missedthecue 5y ago
It's obvious. Nothing is more profitable than a new business in an extremely competitive and cutthroat industry with entrenched players, that also requires very high levels of annual CapEx spend simply to sustain production.
- dragontamer 5y ago
  And one of those entrenched players (Ford) owns 13% of Rivian. Oy, this market is going all topsie-turnie right now. Ford's singular, biggest asset is its stake in Rivian for crying out loud. And with a Market cap of only 80 Billion or so, Ford is smaller than Rivian at these valuations.
  - mistrial9 5y ago
    perhaps its crazy - but, the money is flowing towards the future, not the past. Ford Motor Company has not been a winner in the last 20 years, while Tesla has attracted new money.
    - dragontamer 5y ago
      Ford is up this year more than Tesla is actually. I'm betting their partnership with Rivian is a big part of that. EDIT: Year-to-date YTD at least. I thought F was up more than Tesla in 52-week but I was mistaken. Still though, you can see that the F ticker has skyrocketed with this strategy, despite the obvious headwinds of "Ford doesn't have enough chips to even make their allotted cars this year". Like, I get it. Its a strategy for Ford / Amazon to be "hip" and "cool" by supporting Rivian and participating in this hype. Its stupid but it seems like its working, for F's stock to go up so much despite all of the manufacturing issues they had (idle factories / layoffs), is just how stupid this market is right now. There's so much stupid in the market these days that its hard to keep up.
  - baq 5y ago
    bought ford today, the cheapest way to own rivian.
  - mrep 5y ago
    But they are different types of companies, Rivian is a car company and Ford is a pension and healthcare company that also makes cars. Only half joking.
adamnemecek 5y ago
They managed to build an electric truck before anyone else. That’s pretty neat.
invalidname 5y ago
Not sure I'm smarter but my take is this. People look at Tesla and are looking for a 2nd that can get close to their valuation. Traditional companies are encumbered by contracts and the need to support existing infrastructure (garages, resellers etc.) all of that doesn't work well for electric. These guys have very deep pockets, big contracts with Amazon etc. that can keep them pushing out cars for years and they don't have a history to encumber them. They can copy everything Tesla does and the market is big enough to support them. I think the valuation is wishful thinking and a lot still remains to be seen but who knows...
pcurve 5y ago
I think you nailed it with the greater fool theory. Everyone knows $100billion is nonsense, but this is a pure momentum play. This sector is red hot still.
- nowherebeen 5y ago
  I like the new Rivian truck, but they only have a few factories and sold a few cars. I just can't understand how its even 10% market value of Tesla.
  - pcurve 5y ago
    agreed, and truck buyers are notoriously loyal to their brands especially in higher-priced segment. I like their SUV https://rivian.com/r1s https://rivian.com/r1s but it's $75k. At least Tesla has other side businesses going for it, but I even question TSLA long term valuation. I guess investors are thinking they will gradually transition into IP and software technology company, like Android. And let car mfrs fight over the hardware space.
    - georgeburdell 5y ago
      >I like their SUV https://rivian.com/r1s https://rivian.com/r1s but it's $75k. $75k is $20k cheaper than the Model X, doesn't have the silly doors, and has a 3rd row option that adults can sit in. R1S will sell like hotcakes to eco-minded soccer moms. And, there is no competition in sight from any other manufacturer (electric hummer doesn't have the 3rd row option)
  - asdff 5y ago
    I can't understand how tesla is 10x the market value of ford. they build their cars in a tent. ford has manufacturing facilities across the globe.
asdff 5y ago
Robinhood pushed me a notification that their ipo was available, so I wouldn't be surprised if this was fueled by meme stock folks who saw that notification, and just bought it because fomo. Dangerous imo that robinhood can push these pumps on people.
spaetzleesser 5y ago
Greater fool theory for sure. Once they have dumped the stock on retail investors, who cares what happens? Tesla was lucky that they had a maniac like Musk who just willed the company to success but there are not many people like this.

Swizec 5y ago

“omg I wish I had bought Tesla early”

missedthecue 5y ago

It's obvious. Nothing is more profitable than a new business in an extremely competitive and cutthroat industry with entrenched players, that also requires very high levels of annual CapEx spend simply to sustain production.

dragontamer 5y ago
And one of those entrenched players (Ford) owns 13% of Rivian. Oy, this market is going all topsie-turnie right now. Ford's singular, biggest asset is its stake in Rivian for crying out loud. And with a Market cap of only 80 Billion or so, Ford is smaller than Rivian at these valuations.
- mistrial9 5y ago
  perhaps its crazy - but, the money is flowing towards the future, not the past. Ford Motor Company has not been a winner in the last 20 years, while Tesla has attracted new money.
  - dragontamer 5y ago
    Ford is up this year more than Tesla is actually. I'm betting their partnership with Rivian is a big part of that. EDIT: Year-to-date YTD at least. I thought F was up more than Tesla in 52-week but I was mistaken. Still though, you can see that the F ticker has skyrocketed with this strategy, despite the obvious headwinds of "Ford doesn't have enough chips to even make their allotted cars this year". Like, I get it. Its a strategy for Ford / Amazon to be "hip" and "cool" by supporting Rivian and participating in this hype. Its stupid but it seems like its working, for F's stock to go up so much despite all of the manufacturing issues they had (idle factories / layoffs), is just how stupid this market is right now. There's so much stupid in the market these days that its hard to keep up.
- baq 5y ago
  bought ford today, the cheapest way to own rivian.
- mrep 5y ago
  But they are different types of companies, Rivian is a car company and Ford is a pension and healthcare company that also makes cars. Only half joking.

adamnemecek 5y ago

They managed to build an electric truck before anyone else. That’s pretty neat.

invalidname 5y ago

Not sure I'm smarter but my take is this. People look at Tesla and are looking for a 2nd that can get close to their valuation. Traditional companies are encumbered by contracts and the need to support existing infrastructure (garages, resellers etc.) all of that doesn't work well for electric. These guys have very deep pockets, big contracts with Amazon etc. that can keep them pushing out cars for years and they don't have a history to encumber them. They can copy everything Tesla does and the market is big enough to support them. I think the valuation is wishful thinking and a lot still remains to be seen but who knows...

pcurve 5y ago

I think you nailed it with the greater fool theory. Everyone knows $100billion is nonsense, but this is a pure momentum play. This sector is red hot still.

nowherebeen 5y ago
I like the new Rivian truck, but they only have a few factories and sold a few cars. I just can't understand how its even 10% market value of Tesla.
- pcurve 5y ago
  agreed, and truck buyers are notoriously loyal to their brands especially in higher-priced segment. I like their SUV https://rivian.com/r1s https://rivian.com/r1s but it's $75k. At least Tesla has other side businesses going for it, but I even question TSLA long term valuation. I guess investors are thinking they will gradually transition into IP and software technology company, like Android. And let car mfrs fight over the hardware space.
  - georgeburdell 5y ago
    >I like their SUV https://rivian.com/r1s https://rivian.com/r1s but it's $75k. $75k is $20k cheaper than the Model X, doesn't have the silly doors, and has a 3rd row option that adults can sit in. R1S will sell like hotcakes to eco-minded soccer moms. And, there is no competition in sight from any other manufacturer (electric hummer doesn't have the 3rd row option)
- asdff 5y ago
  I can't understand how tesla is 10x the market value of ford. they build their cars in a tent. ford has manufacturing facilities across the globe.

asdff 5y ago

Robinhood pushed me a notification that their ipo was available, so I wouldn't be surprised if this was fueled by meme stock folks who saw that notification, and just bought it because fomo. Dangerous imo that robinhood can push these pumps on people.

spaetzleesser 5y ago

Greater fool theory for sure. Once they have dumped the stock on retail investors, who cares what happens? Tesla was lucky that they had a maniac like Musk who just willed the company to success but there are not many people like this.