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Amazon always seemed to claim they could have been profitable in the years after they IPO'd but simply chose to reinvest in growth and development. Investors be
by runnerup 4y ago
Amazon always seemed to claim they could have been profitable in the years after they IPO'd but simply chose to reinvest in growth and development. Investors believed in high future returns on this re-investment and preferred it over extracting it via dividends.
I'm not sure Rivian is making similar claims or investors would believe them if they were. Most likely, investors in Rivian are anxious for them to become profitable now that they're finally producing and selling cars. The "hard/expensive" part should be over for Rivian now that their production lines are operational.
These are very different companies operating in very different industries.
- bryanlarsen 4y agoRivian needs something like Tesla's profitable 2H2018 where they showed that they could be profitable just selling S's and X's just before they endured massive losses while ramping up the 3 and Y.
- shalmanese 4y agoFor a company, making a profit is the company saying across all of our divisions, on all the work that we do, we couldn't find a single initiative that we believe will return a higher risk adjusted ROI than paying down debt/putting money in a bank account/investing in index funds/returning money to shareholders. When you have an order book 100,000 vehicles deep, the last thing on your mind should be making profits. There's obviously thousands of different projects at the company that are going to be returning wildly higher ROI than public markets and you should be spending your money on exploiting those opportunities.