Rivian Automotive Stock News and Forecast: Is RIVN stock too high?

• Rivian (RIVN) stock makes its debut on Wednesday on the Nasdaq, ticker symbol RIVN.
• RIVN is one of the top 5 biggest US IPOs ever.
• Rivian's market cap surpasses traditional automakers Ford (F), BMW, Honda.

Rivian (RIVN) stock finally made its much-anticiapted debut on the Nasdaq exchange on Wednesday as the frenzy over the electric vehicle manufacturer reached fever pitch. The stock took its time to open as the sheer volume of orders likely necessitated several delays but it eventually opened at $106.75 just around 1300 EST. Volume was understandably huge, and the stock was trending across mainstream and social media platforms thoughout the day.

Rivian (RIVN) IPO

The IPO raised nearly $12 billion and by our estimates positioned it as the fifth largest US IPO ever. Reports had put it in the top ten earlier, but as the IPO price was constantly revised upwards so too did its ranking. Having started out with a range in the high $50s and then increased to a $73 midpoint, Rivian eventually IPO'd at $78. Interest was sky high from retail investors though, and once the call or quote phase opened on the Nasdaq exchange, it became clear that this one was going to run and run. After some time RIVN stock eventually opened at $106.75 on volume of over 10 million shares. 

Rivian (RIVN) stock news

RIVN shares traded as high as $119.46 very early in the session before sliding as the day progressed to a low of $95.20. Interest picked up again toward the close, which saw Rivian stock retake the $100 level and close at $100.73. This gives RIVN a market cap of $86 billion. General Motors (GM) is also worth $86 billion. Ford (F) is worth $77 billion. Ford sells nearly 5 million vehicles a year. Rivian (RIVN) has orders for about 55,000 vehicles and 100,000 vans. It hopes to fill the order for vehicles by 2023 and by 2025 for the vans.

Even compared to other electric vehicle manufacturers, this one looks way too high in our view. NIO is worth $60 billion and delivered 145k vehicles to the end of October. LiAuto (LI) is worth $31 billion and delivered nearly 63k vehicles for the year to end October. XPeng (XPEV) is worth $37 billion and delivered 66k vehicles year-to-date. The Chinese market is the largest market in the world for electric vehicles (EVs). China has notable policies in place to promote the sector, and that is why Tesla (TSLA) has expanded there and has its Shanghai factory. Rivian (RIVN) has ambitious plans, but at the current valuation it is too high. 

Rivian (RIVN) stock forecast

Trading and investing are two separate things. While we outline what we feel is a stretched valuation above, trading is more short-term and focused on momentum. That makes Rivian interesting as momentum and swings will likely be strong here. However, always use stops or strong risk management. Now we should also note that recent blockbuster IPOs will often present a better opportunity to get in if you wait for some time. Facebook (FB) tanked after its IPO. LinkedIn opened at $83, but you could buy it for $63 a few months later. Even this year Roblox was recently listed at $64.50 and it is only this week that the stock has pushed significantly higher.

The point is just at the time of listing or IPO is when interest is highest. This is when everyone wants to buy. Already, however, the main institutional investors are long, and they will not be flipping shares. The only ones flipping shares are likely short-term investment funds, so they are flipping to retail investors. When the interest drops there is no one left to hold up the price, so it is worth keeping that in mind. 

Cathie Wood also said in an interview on Wednesday that she would not buy Rivian at current levels. General Motors (GM) CEO Mary Barra said the Rivian IPO proves that General Motors is undervalued.

Rivian (RIVN) stock chart

Too early to really have anything for you on the technical analysis front. Interesting to note though that the point of control or highest volume is down at $100.76, likely due to the large closing auction. 

RIVN 1-day chart