<story><title>Rivian valued at over $100B after biggest IPO of 2021</title><url>https://www.reuters.com/business/autos-transportation/ev-maker-rivian-set-high-profile-market-debut-after-mammoth-ipo-2021-11-10/</url></story><parent_chain><item><author>qqtt</author><text>Lots of talk about balking at this valuation, and that is probably a reasonable reaction, but as others have said, I want to point out that companies are valued based on their future and projected growth, not how much they are worth today.&lt;p&gt;Much has been made about Tesla being worth more than all other automakers combined, but let&amp;#x27;s look at the growth.&lt;p&gt;Tesla Q3 Revenue: 13.76B, Year over year growth: 56%&lt;p&gt;Tesla Q3 Net Income: 1.6B, Year over year growth: 388%&lt;p&gt;GM Q3 Revenue: 26.78B, Year over year growth: -24%&lt;p&gt;GM Q3 Net Income: 2.42B, Year over year growth: -40%&lt;p&gt;Tesla is growing like bonkers, wildly more profitable, and has a much brighter future than GM given these trajectories. It&amp;#x27;s almost like either GM is severely overvalued at 90B market cap or Tesla is undervalued at 1T.&lt;p&gt;Tesla has also proven that traditional automakers really struggle to keep up with the electric car race - from software to supply chain. Rivian, like Tesla, is built top to bottom to play in this market, with the added backing of Amazon and products tailor made for enterprise scale needs that companies like Amazon need.&lt;p&gt;Of course Rivian is a risky investment today - their stock is priced for perfection. We saw what happened last quarter when stocks priced for perfection fall short (take a look at Snapchat). But plenty of these arguments &amp;quot;Rivian is only selling 1000 cars!&amp;quot; also applied to Tesla about 10 years ago.&lt;p&gt;A business is valued based on its future prospects. Growth companies are risky.&lt;p&gt;Edit to add Ford numbers:&lt;p&gt;Ford Q3 Revenue: 35.68B , Year over year growth: -4%&lt;p&gt;Ford Q3 Net income: 1.8B, Year over year growth: -23%&lt;p&gt;Also want to point out - all automakers are operating in the same pandemic - Ford, GM, and Tesla are all dealing with supply chain issues and chip shortages.</text></item></parent_chain><comment><author>onlyrealcuzzo</author><text>Since Tesla is now the elephant in the room - it&amp;#x27;s possible Tesla is distorting the entire auto industry.&lt;p&gt;Tesla was one of the 5 largest companies in the world - something an auto manufacturer hasn&amp;#x27;t been in almost 50 years.&lt;p&gt;Tesla had BY FAR the highest P&amp;#x2F;E ratio for any company of that market cap (as a percentage of global wealth) in history.&lt;p&gt;Tesla&amp;#x27;s revenue growth is not much bigger than Alphabet&amp;#x27;s or Apple&amp;#x27;s - and these are companies with orders of magnitude more revenue and profit.&lt;p&gt;For the last 50-ish years - outside of a few small companies (Ferrari, etc)  - auto manufacturing has been a pretty terrible business.&lt;p&gt;Tesla people keep trying to say that Tesla is really an infrastructure play or an Internet company or a services companies or even a space company - but... currently it&amp;#x27;s not. And even if it became any of those things - even at it&amp;#x27;s current growth rate - its P&amp;#x2F;E to growth rate is still unbelievably high.&lt;p&gt;I don&amp;#x27;t really care if GM and Ford and Rivian are now overvalued - and compared to them Tesla is undervalued. Auto manufacturing is not suddenly going to become the most profitable business in the world. People aren&amp;#x27;t going to suddenly start paying more for cars than housing. People aren&amp;#x27;t going to suddenly own 30 cars a piece. Tesla is never going to grow enough to be worth it&amp;#x27;s current market cap. But the market can stay irrational longer than you can stay solvent - and I wouldn&amp;#x27;t take a bet that Tesla crashes if my life depended on it.</text></comment>
<story><title>Rivian valued at over $100B after biggest IPO of 2021</title><url>https://www.reuters.com/business/autos-transportation/ev-maker-rivian-set-high-profile-market-debut-after-mammoth-ipo-2021-11-10/</url></story><parent_chain><item><author>qqtt</author><text>Lots of talk about balking at this valuation, and that is probably a reasonable reaction, but as others have said, I want to point out that companies are valued based on their future and projected growth, not how much they are worth today.&lt;p&gt;Much has been made about Tesla being worth more than all other automakers combined, but let&amp;#x27;s look at the growth.&lt;p&gt;Tesla Q3 Revenue: 13.76B, Year over year growth: 56%&lt;p&gt;Tesla Q3 Net Income: 1.6B, Year over year growth: 388%&lt;p&gt;GM Q3 Revenue: 26.78B, Year over year growth: -24%&lt;p&gt;GM Q3 Net Income: 2.42B, Year over year growth: -40%&lt;p&gt;Tesla is growing like bonkers, wildly more profitable, and has a much brighter future than GM given these trajectories. It&amp;#x27;s almost like either GM is severely overvalued at 90B market cap or Tesla is undervalued at 1T.&lt;p&gt;Tesla has also proven that traditional automakers really struggle to keep up with the electric car race - from software to supply chain. Rivian, like Tesla, is built top to bottom to play in this market, with the added backing of Amazon and products tailor made for enterprise scale needs that companies like Amazon need.&lt;p&gt;Of course Rivian is a risky investment today - their stock is priced for perfection. We saw what happened last quarter when stocks priced for perfection fall short (take a look at Snapchat). But plenty of these arguments &amp;quot;Rivian is only selling 1000 cars!&amp;quot; also applied to Tesla about 10 years ago.&lt;p&gt;A business is valued based on its future prospects. Growth companies are risky.&lt;p&gt;Edit to add Ford numbers:&lt;p&gt;Ford Q3 Revenue: 35.68B , Year over year growth: -4%&lt;p&gt;Ford Q3 Net income: 1.8B, Year over year growth: -23%&lt;p&gt;Also want to point out - all automakers are operating in the same pandemic - Ford, GM, and Tesla are all dealing with supply chain issues and chip shortages.</text></item></parent_chain><comment><author>greedo</author><text>Comparing YoY quarters especially during a pandemic is not really a very good methodology for determining market trends. Even when you add a qualifier like &amp;quot;given these trajectories.&amp;quot;&lt;p&gt;Also, I think you&amp;#x27;re underestimating Tesla&amp;#x27;s competition by focusing on GM. Ford is a much larger threat to Tesla than GM, and already has an EV that&amp;#x27;s roughly comparable in price&amp;#x2F;performance to the Model Y. The Mustang Mach-E should be evaluated by any prospective EV buyer, and the F-150 Lightning has the potential to leave the Cybertruck stillborn.&lt;p&gt;Rivian has none of the advantages of Tesla (name recognition, Supercharger network) nor none of the advantages of the traditional ICE manufacturers (volume, fit and finish, dealer network). Other than Amazon&amp;#x27;s backing, Rivian is one of the last companies I&amp;#x27;d consider for buying an EV.</text></comment>