Is Rivian Worth Half Of Ford?

By Douglas A. McIntyre Published Jul 8, 10:14AM EDT

Quick Read

RIVN dropped 18% on a dilutive share sale yet still holds a $25 billion market cap while selling just 67,000 vehicles annually.
F generates $187 billion in revenue yet holds only twice Rivian's market cap, while TSLA's $1.51 trillion valuation reflects AI and robotics speculation.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Rivian didn't make the cut. Grab the names FREE today.

Is Rivian Worth Half Of Ford? — © 22 Rivian R1T Adventure (CC0 1.0) by HJUdall

Rivian’s (NASDAQ: RIVN | RIVN Price Prediction) stock dropped 18% on news that it would issue new equity to pay off debt. The day before, it was worth half as much as Ford (NYSE: F) based on market cap. Rivian’s is $25 billion today. Ford’s is $53 billion. Rivian’s stock is down 80% since late 2021. It went public in November 2021. Ford’s is close to flat. That means Rivian’s IPO gave it a value well above Ford’s

Rivain will sell about 67,000 vehicles this year. Ford will sell about 4.3 million. What’s wrong with this picture?

Rvian had $5.4 billion in revenue last year and lost $3.5 billion. Ford’s revenue was $187.2 billion, on which it lost $8.2 billion. Ironically, Ford’s loss was due to its EV business.

As astonishing as it may be, Rivian continues to benefit from EV mania, even as the EV sector across the US is in trouble. Tesla (NASDAQ: TSLA) has a market cap of $1.51 trillion. However, much of this is based on a future that will presumably have the best AI-driven and self-driving cars and an army of tens of millions of robots. Tesla’s future is worth much more than its present.

The sale of Rivian stock was for 75 million shares at $15.50 per share. They raised $1.2 billion. Most will be used to pay off money due because of the Amended and Restated Loan Arrangement and Reimbursement and Sponsor Support Agreement with the U.S. Department of Energy. Some will be used to help expand the company.

What does Rivian have going for it? One thing that may not work. VW may invest as much as $5.8 billion into a joint venture to build a “next-generation” EV. However, $3.5 billion of the investment is pending and may never be made by VW.

Based on any rational valuation, Rivan is worth much less than its current market cap. This means the stock has much further to fall.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.