Jim Cramer attempts to make sense of EV start-up Rivian's $86 billion valuation

CNBC's Jim Cramer reported Wednesday on the reasons Rivian Automotive was successful in its debut to the market. This was despite the fact that many growth-oriented stocks were forced to sell due to inflation fears.
Rivian's market capital of $85.9billion is more than Ford's $77.4billion and just short of General Motors' $86.05billion. The "Mad Money” host suggested that Rivian could be mistakenly compared to the legacy Detroit automakers.

"Electric vehicle manufacturers are in a league all their own when compared to the old-school auto businesses that still heavily rely on the dreaded internal combustion engine. It doesn't mean Rivian isn't worth it, but it does suggest that you shouldn't ignore it." Cramer stated.

"Rivian's stock is set by buyers that believe electric vehicles are takingover the world, and there are enough true believers post-Tesla’s phenomenal success in the money management industry to send this stock into a stratosphere. And it may not," he said.

Rivian is currently without any revenue and has delivered only 156 electric trucks to date, but Cramer stated that investors in Rivian are focusing on Rivian’s backers, specifically Amazon and Ford.

Cramer stated that Ford's stake in Rivian is not yet clear. However, Amazon has placed an order to purchase 100,000 Rivian electric vans for its delivery fleet.

Rivian's history is one that you don't often see. Rivian has a proven track record of selling out its production lines before they even go into mass production.

Rivian's strong opening session coincided with a difficult day for many growth-oriented stocks as investors digested recent hot inflation data. For example, the Vanguard Growth Index Fund ETF shares lost 1.57% Wednesday compared to a 0.8% drop for the broad S&P 500.

"You may be asking, why wasn't Rivian also killed?" Cramer asked. It's quite simple. Rivian isn't rallying despite the sell-off of growth stocks; growth stocks fell partly because Rivian was involved in selling similar assets to gain stock or participate in the deal.

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