Rivian Is a Horrible Stock

By Douglas A. McIntyre Published Jun 27, 6:40AM EDT

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Rivian Is a Horrible Stock — © Spencer Platt / Getty Images

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Volkswagen’s investment in Rivian Automotive Inc. (NASDAQ: RIVN | RIVN Price Prediction) has not made it a better stock.

Over the past three years, it has been hard for investors to find a more horrible stock than Rivian Automotive Inc. (NASDAQ: RIVN). It recently rallied 23% on news of an investment from Volkswagen that may eventually total $5 billion. It had a market value of $15 billion at the end of the day. However, on the day it went public, November 10, 2021, its market cap was $86 billion. It would be hard to find a company with management that could wipe out $70 billion in shareholder value, destroying the share value of an untold number of investors. Management should end up in some public stock hall of shame.

Rivian has lost tens of billions of dollars, which included over $1.4 billion in the most recent quarter. Quarter after quarter, it showed results of tiny unit sales for this cash destruction. In the latest quarter, that was 13,588 vehicles. Large car companies sell more vehicles than that in a day. Management said it would produce 57,000 in 2024, which means financial losses will not end and may not have if VW did not come to the rescue.

Rivian had the wildly wrong idea that it could sell electric pickups for $72,000 in a market in which consumers said they were worried electric vehicles (EVs) were priced too high. It also offered SUVs at prices of $80,000. The idea was a failure at the start. Combine it with Americans’ anxiety about EV range and the number of charging stations, and Rivian never had a chance.

VW will pick over Rivian’s bones to find its best software. It is the only reason the world’s second-largest car company put up what may be $5 billion, and may be less.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.