Rivian's Electric IPO

November 12, 2021 Rivian's Electric IPO Good morning traders, Welcome back to The Daily Setup. Markets were mixed yesterday, with the S&P 500 and Nasdaq gaining while the Dow dropped. Here’s what’s on the docket today: - Rivian’s IPO was the biggest since 2014 - Inflation increased 6.2% from a year ago - The SEC’s looming decision on a spot Bitcoin ETF So have a cup of coffee, read through the newsletter, and we’ll see ya on Monday. Jeff Trade Desk, AMD, and Coty Biggest Mover BIGGEST MOVER Rivian’s Electric IPO Electric vehicle maker Rivian (RIVN) had its IPO Wednesday, and to say it was electric would be an understatement. The company, which is backed by the likes of Amazon and Ford, priced its shares at $78 Tuesday evening, but started the trading session Wednesday 37% higher at $106.75. It was the largest IPO since Alibaba, which just [had its annual single’s day](, back in 2014. Shares of Rivian closed Wednesday’s trading session up [29.1% at $100.73]( and continued the hot streak Thursday with a 22.1% gain. - This opening price immediately gave the company a market valuation of $91B, which is already greater than both Amazon and Ford. This makes complete sense since Rivian has yet to turn a profit, while Amazon and Ford, well, are Amazon and Ford. - [CEO RJ Scaringe said](, “The IPO represents an opportunity to accelerate how quickly we can go. We have to go build a lot of vehicles.” Seems obvious for a carmaker, but you’d be surprised. I’m looking at you Workhorse (WKHS) and Nikola (NKLA). - The company began delivering their first vehicle, the R1T, an electric pickup truck, in September, and plans to launch an SUV and commercial fleet delivery truck by year end. This is an extremely promising start for the company that will likely continue to garner lots of attention. However, it’s not all sunshine and unicorns as close followers of the EV industry are already aware: - The company said in its prospectus that it will lose up to $1.28B in Q3 with revenue in the $0-$1M range. *rereads its $91B valuation and scratches head* - Established automakers often have a hard time launching multiple models one after the other. As a relative newcomer to the industry, Rivian will have its work cut out for it. - Finally, it is facing a lawsuit from [former executive Laura Schwab]( who questioned the company’s ability to deliver on its promises, its toxic “bro-culture”, and that she had been subjected to gender discrimination. So basically [the Phoenix Suns.]( Grande still standing [Come On Reaction GIF by WWE - Find & Share on GIPHY]( Evergrande narrowly avoided catastrophe on Wednesday, [paying $150M in overdue interest]( on at least two of the three dollar bonds that would otherwise have run out and led to default. It’s not clear where or how Evergrande found this money all of the sudden, but it might have fallen off the back of [a certain CEO’s truck](. - This is just one more block successfully removed from a very unstable Jenga tower of debt. To stay afloat, Evergrande has to repay [$7.4B](in maturing bonds next year, and many more deadlines after that. If $150M was a stretch, it’s hard to see how they’ll dig themselves out of a [$300B hole.]( Borrowing. Definitely more borrowing. - Evergrande is no isolated incident. Really they’re just the crown jewel in the royal sh*tshow that is the Chinese property development scene. At least six other property developers have defaulted on foreign bonds in the past week, partly stymied by Evergrande, but also by [industry-wide irresponsible fiscal practices.]( Nothing happens in isolation. If Evergrande falls, it could well set off a tsunami of default that would not only cripple China’s economy but ripple out to global markets and hurt risk sentiment everywhere. [The Fed has warned]( that this could seriously dampen U.S. economic growth, or even lead to a [stock market crash](, leading many observers to no doubt pay close attention to China’s debt crisis. Up, Up, and Away The U.S. Bureau of Labor Statistics released October’s [CPI data]( on Wednesday, and Spoiler: things are not cooling off. Inflation increased 6.2% from a year ago, making October the fifth straight month in which YoY inflation has exceeded 5%. In addition, the CPI was up 0.9% in October, up from September’s 0.4%, and the growth spurt isn’t so cute this time around. - Prices rose for everything but alcohol and airfare, so Don Draper will be just fine. Many attribute the broad-based increases to the [labor shortage]( and supply issues, citing the cyclical rise in prices that happen when employers have to pay higher wages to staff their businesses and foist the higher cost off on consumers. - All signs from this current report point to sustained inflation, which makes everything harder for the Fed and [sleepy President Biden.]( The former will experience mounting pressure to speed up its tapering/rate hike timeline, while the latter will face GOP ire for implementing huge spending packages that will exacerbate record-high inflation. Power sounds like it sucks... - Alternative investments like Bitcoin, Ethereum, and spot gold all spiked when the news hit, with BTC hitting a new record high at [$69k](. Nice. This means your annoying cryptobull friends are rich, but you can still piss them off by reminding them that celebrating makes them un-American. Inflation is likely to persist even if individual shortages like the semiconductor crisis abate, and alternative investments such as cryptocurrencies are a reasonable option. That said, it’s probably not time to completely abandon Uncle Sam’s ship. The [dollar index]( was up on Wednesday after the CPI report dropped, suggesting that inflationary pressures are global and that the world generally has faith in the United States’ economic growth. Let's go to the moon Crypto Corner To the Moon, Maybe? It’s the biggest [will they or won’t they]( question since Ted and Robin if you’re kind of old, Ross and Rachel if you’re ready to buy those weird reading glasses that clip together with magnets, or Sam and Diane if you’re looking at condos in Boca. A decision appears to be near on whether or not the SEC will approve the first spot Bitcoin ETF. After delaying action twice, the clock runs out on November 14th. - VanEck has filed an application for what would be the first ETF that tracks the spot price of the OG cryptocurrency. - The first Bitcoin futures ETFs began trading on October 19 with an offering from ProShares (BITO), and a product from Valkyrie (BTF) began on October 22. - SEC Chairman Gary Gensler has expressed reluctance to approve crypto related offerings that operate in a non-regulated space. He’ll also be more than happy to tell you about the cryptocurrency class he taught at MIT while poking Bitcoin enthusiasts right in the laser eyes. Displaying remarkable competence for a government agency, the SEC has managed to keep any clues as to their decision under wraps so far. The crypto community is [betting on approval](, while the paper hands in the analyst community are largely pessimistic. If the approval does happen, it could be a catalyst to send BTC rocketing above the $65,000 level it has traded at recently. Maybe at long last it’s time to start looking at real estate on the moon. Uber lawsuit, Beyond Meat, and Disney Other News Humanity Continuing to Sink Lower Shares of Uber closed Wednesday’s trading session lower by [4.7%]( following an announcement that the [Justice Department was suing]( the ride-share company for charging wait-time fees to riders with physical disabilities. And here I thought Amazon forcing their workers [to piss in plastic bottles]( was wrong. The Justice Department is asking that the company be forced to comply with the Americans with Disabilities Act, as they should, since it takes some disabled individuals longer than two minutes to get into their Uber. - [The company charges a wait-time fee]( starting two minutes after a driver arrives at a pickup location and lasts until the car begins its trip. - Uber says the average wait-time fee charged is less than 60 cents. - The court is asking that Uber modify its wait-time policy and pay monetary damages to those affected by the illegal fees. - I’m assuming that the Justice Department will not be giving Uber a 5-star rating at this time. Meat Gets Beat Beyond Meat (BYND) saw its shares get spanked Thursday after reporting [Q3 earnings]( that were worse than the taste of their plant burgers. The company reported a loss of $0.87/share vs. the Street’s estimate of a loss of $.38/share. Beyond also said that the outlook would not be pretty as sales would not rebound immediately. Analysts across the industry downgraded BYND, with Credit Suisse analyst [Robert Moskow saying]( that, âBeyond could be reaching market saturation faster than expected. The stock closed Thursday’s trading session down [13.3% at $81.93](. - According to BTIG analyst Peter Saleh, the industry is looking towards Beyond Meat’s partnership with McDonald’s and their launch of the McPlant in Europe, which could generate a potential $200M in additional revenue. Sounds McAwful to me. - Beyond Meat is also in development on new products with Pizza Hut, Yum Brands (Taco Bell’s parent company), and PepsiCo which could help spark some good news for the company’s bottom line. - [CEO Ethan Brown said]( that the weak performance was, "attributed to the Delta variant, labor shortages, and shipping delays." I’m using that as an excuse next time my wife is mad at me about something. Apparently it’s the go-to excuse for 2021. - BYND has now reached all-time lows, so keep an eye on this stock to see if bargain hunters rush in and prop the stock back above the $100 level. Help Us Baby Yoda, You’re Our Only Hope It’s going to take a superhero-like effort to save Disney’s (DIS) 2021 stock performance after the company reported [wildly disappointing earnings]( for their fiscal year on Wednesday after the bell. The stock got blown up like a womp rat from Luke’s T-16 back on Tatooine (a Star Wars reference for those who are confused), closing down 7.07% on the day. Corporate HQ in Burbank definitely isn’t the happiest place on Earth today. - EPS came in at $0.37 vs. expectations of $0.51, while the $18.53B in revenue missed estimates of $18.79B. - The Street was especially disappointed in Disney+ subscriber numbers, as the company reported 2.1M additions, well short of the 9.4M some analysts were looking for. - There was some good news for Disney+ customers at least, as the company will be releasing new content from Star Wars, Marvel, Disney, Pixar, and National Geographic all by the end of year. - [Inflation concerns]( could be a near term headwind for Disney in the form of increased streaming costs. If the company cannot raise prices for Disney+ to keep pace with an upward trend in production costs, shareholders could be in for a wild ride, like letting The Rock work the wheel on the teacup ride. [Image] RagingBull, LLC 62 Calef Hwy. #233, Lee, NH 03861 [Unsubscribe from all RagingBull emails]( Questions or concerns about our products? Call or text us on your mobile: 1.800.123.4567 © Copyright 2020, [RagingBull]( - [Refund Policy]( - [Privacy Policy]( - [Terms & Conditions]( DISCLAIMER: To more fully understand any Ragingbull.com, LLC ("RagingBull") subscription, website, application or other service ("Services"), please review our full disclaimer located at [(. FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. Any RagingBull Service offered is for educational and informational purposes only and should NOT be construed as a securities-related offer or solicitation, or be relied upon as personalized investment advice. RagingBull strongly recommends you consult a licensed or registered professional before making any investment decision. RESULTS PRESENTED NOT TYPICAL OR VERIFIED. RagingBull Services may contain information regarding the historical trading performance of RagingBull owners or employees, and/or testimonials of non-employees depicting profitability that are believed to be true based on the representations of the persons voluntarily providing the testimonial. However, subscribers' trading results have NOT been tracked or verified and past performance is not necessarily indicative of future results, and the results presented in this communication are NOT TYPICAL. Actual results will vary widely given a variety of factors such as experience, skill, risk mitigation practices, market dynamics and the amount of capital deployed. Investing in securities is speculative and carries a high degree of risk; you may lose some, all, or possibly more than your original investment. RAGINGBULL IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER. Neither RagingBull nor any of its owners or employees is registered as a securities broker-dealer, broker, investment advisor (IA), or IA representative with the U.S. Securities and Exchange Commission, any state securities regulatory authority, or any self-regulatory organization. Employees, owners, and other service providers of [RagingBull.com](, LLC are paid in whole or in part by commission based on their sales of Services to subscribers. WE MAY HOLD SECURITIES DISCUSSED. RagingBull has not been paid directly or indirectly by the issuer of any security mentioned in the Services. However, Ragingbull.com, LLC, its owners, and its employees may purchase, sell, or hold long or short positions in securities of the companies mentioned in this communication. [Unsubscribe from all RagingBull emails](