> Some in the investment community say that much like Tesla's rally to become the most valuable car company on Earth, Rivian's value is also a sign that valuations have gotten out of hand.
> "Despite the popularity of the electric vehicle market and huge gains in Tesla's stock, we think investors should avoid the temptation to buy Rivian shares," investment research firm New Constructs said of the company ahead of the IPO.
> The firm notes that when Tesla went public in 2010, it was valued at $1.7 billion US, was at least already delivering vehicles to paying customers, and was on track to sell 1,500 vehicles that first year. That's more than Rivian says it will do, despite now being worth about 50 times what Tesla was worth then.
> "To buy the stock at such a high price before the company has shown it can consistently produce more than a handful of cars seems ridiculous to us," New Constructs said. "Investors shouldn't buy a stock just because it's in a hot sector."
Rivian might very well prove to be a horrible investment at current prices. It would certainly impossible to justify its valuation in a sane, "normal" market. But the market hasn't been normal for over a decade and just keeps getting less and less sane.
Is there really any point in trying to warn people about valuations anymore? As far as the market is concerned, we're basically living in a post-logic, post-sanity world and sadly, investors who stick to logic and sanity are going to miss out on most of the gains.
Of course, if and when the bubble pops, a lot of people will lose money but that doesn't mean that the logic and sanity folks will profit because, well, you'd have to be insane to be heavy short almost anything in this market.
> "Despite the popularity of the electric vehicle market and huge gains in Tesla's stock, we think investors should avoid the temptation to buy Rivian shares," investment research firm New Constructs said of the company ahead of the IPO.
> The firm notes that when Tesla went public in 2010, it was valued at $1.7 billion US, was at least already delivering vehicles to paying customers, and was on track to sell 1,500 vehicles that first year. That's more than Rivian says it will do, despite now being worth about 50 times what Tesla was worth then.
> "To buy the stock at such a high price before the company has shown it can consistently produce more than a handful of cars seems ridiculous to us," New Constructs said. "Investors shouldn't buy a stock just because it's in a hot sector."
Rivian might very well prove to be a horrible investment at current prices. It would certainly impossible to justify its valuation in a sane, "normal" market. But the market hasn't been normal for over a decade and just keeps getting less and less sane.
Is there really any point in trying to warn people about valuations anymore? As far as the market is concerned, we're basically living in a post-logic, post-sanity world and sadly, investors who stick to logic and sanity are going to miss out on most of the gains.
Of course, if and when the bubble pops, a lot of people will lose money but that doesn't mean that the logic and sanity folks will profit because, well, you'd have to be insane to be heavy short almost anything in this market.