Jim Kramer Tries To Sort Out $ 86 Billion Valuation For Electric Vehicle Startup Rivian
CNBC’s Jim Kramer spoke Wednesday about the reasons why Rivian Automotive was able to skyrocket during its market debut, despite many other growth-oriented stocks being sold over inflation concerns.
After rising 29% and closing at $ 100.73 a share, Rivian’s market capitalization of $ 85.9 billion exceeds $ 77.4 billion for Ford and General Motor’s $ 86.05 billion. However, the Mad Money presenter argued that comparisons between Rivian and Detroit’s legacy automakers may be flawed.
“Electric car makers are in a league of their own compared to old-school car companies that still rely heavily on horrible internal combustion engines. That doesn’t mean Rivian deserves such a high value, but it does mean you can’t discount it got out of hand, ”Kramer said.
“Rivian’s share price is set by buyers who believe EVs are taking over the world, and there are enough true supporters of the phenomenal success of the wealth management business following the phenomenal success of Tesla to send these shares into the stratosphere, and it may not be,” he added.
While Rivian has virtually no income and has delivered only 156 of its electric trucks to date, Kramer said investors in the company are focused on Rivian’s own supporters, notably Amazon and Ford.
Kramer said it is unclear how long Ford will hold on to its stake in Rivian, but Amazon looks to be involved in the long term because the e-commerce giant has placed an order for 100,000 Rivian electric vans to build its delivery fleet. …
“It’s not often that you see a company with a sold-out production line before it even goes into mass production, but that’s the Rivian lineage.”
Rivian’s strong opening session coincided with a tough day for many upside stocks as investors digested the latest hot inflation data. The Vanguard Growth Index Fund ETF, for example, lost 1.57% on Wednesday, compared with a 0.8% drop in the broad S&P 500.
“You might be wondering why the hell wasn’t Rivian killed too?” Kramer asked. “It’s simple: Rivian is not growing despite the sell-off in growth stocks; growth stocks are sold in part because of Rivian, as [large] investors sold similar assets to get as many shares as possible or to take part in the deal. “
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