Early Investors Winning Here
$Ford Motor(F.US$ and $Amazon(AMZN.US$ , two of $Rivian Automotive(RIVN.US$ notable early investors, with the latter having that initial 100,000 unit order expected to be fulfilled over the next four years. A 10,000 unit fulfillment goal by the end of 2022 requires rapid scaling of production, as does the remaining ~90,000 units over the three following years. Although Rivian's success over the next few years hinges substantially on that single order, these two backers have already seen those investments pay off.
Ford's 103 million share stake in Rivian, which cost around $1.2 billion in total, is worth around $10 billion as of close, or eight times return; Amazon's 162 million share stake, costing nearly $1.85 billion, is worth close to $16.5 billion. These early investors have already made a killing, but have one crucial piece of leverage not afforded to investors of the IPO - downside protection.
With Rivian's $87 billion valuation immediately launching it to the top cohort of the industry, downside potential exists as the company has miniscule delivery and revenue potential for the next few quarters. While long investors of the IPO have no protection to potential downside moves to shares, Ford and Amazon do, as the respective average purchase prices of their shares stands at about $11-12. Therefore, the two can withstand large downside swings, to the tune of ~80% in shares, while still seeing gains within those original investments; 50% downside in Rivian to the $50 range could severely rattle IPO investors, while these two would still hold 350-400% returns. Ford and Amazon can sit back and watch the show unfold, while early investors are betting heavily on immediate success of scaling volumes and growing revenues to find upside from an $87 billion valuation.
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koh Kae : wat our target price,
show u my money : I own Rivian through my AMZN holdings but I don't see why a start up has any advantages over the established carmakers.
Hotbuns : Here I am still waiting @ $74/share LOL
12 Invest Hotbuns: Might have to wait forever
Amy carry : Amazon will keep Rivian going because of their rivalry with Tesla and their aim to develop self driving vehicles. If they equip all their fleet with self-developed cars (rivian) it will boost revenue extremely. Also expect that they will scale up production capacities very quickly and will jump to Europe soon. Their image as eco directed sustainable car maker is an excellent move.
Ponew : Betting against Rivan is betting against Jeff Bezos and Bill Ford ; not people I‘d want to bet against
Rollingling Ponew: I don’t think Ford has a great track record (see Detroit Lions, his time managing Ford) and I don’t think Bezos has risked much. Getting delivery vans from a competitor is ez.
No-Bottle67 Rollingling: True. But isnt the Ford family largely out of the day to day operations of Ford?
emirsway Ponew: Yeah, I would bet against Ford any day of the week and twice on Sunday
NdelVe Ponew: Bill Ford's family also runs the Detroit Lions. Still wanna bet?