Rivian.
Rivian.
Rivian is still a good long-term play despite a steep sell-off this week, if investors can weather the pain that comes with scaling the business.
Morgan Stanley analyst Adam Jonas advised investors to take a lesson from top dog,Tesla, and manage their expectations for the company in the near-term.
Despite a steep sell-off that dragged the shares briefly below their IPO price on Thursday, the bank maintained its overweight rating. The target price was reiterated by the team. The stock was trading at a high and a low. On Friday.
In a January 6 note, the author said that "Tesla has shown us the extremely difficult path to ramping EV manufacturing." You can't have the reward without pain.
Rivian has lost about 30% in the last month, with much of that sell-off happening Thursday after Amazon announced a new deal with Stellantis. An order of 100,000 electric delivery vans from Rivian was announced by the e-commerce giant. The initial public offering price of $78 was briefly touched by the news.
According to Ihor Dusaniwsky of S3 Partners, short sellers have been taking a ride on the stock's decline. He said that the number of shares sold short has increased by more than 40% in the last 30 days.
"This is probably not the stock for you, if you think that the Amazon deal is going to be as bad as it gets for Rivian", said Jonas.
When Musk said that achieving high production and breakeven cash flow would be the true test for the EV-maker, he weighed in. As EV-maker ramps its production, there can be a wide array of problems that can occur.
"If you can run the gauntlet of fires, quality issues, battery fires, software glitch, delays, scathing articles and videos and other accoutrements, the reward can potentially be far greater than what you imagined."
Despite Rivian's slump, he said he's excited about the company and would advise using the dip as a buying opportunity.
Rivian is "The One" to be included in any diversified EV portfolio, he said.
Business Insider has an original article.
