VWAGY - Why Do Some Tesla Investors So Despise Rivian? — Asks Bullish Gary Black: They Don't Appear To Get 'The Rationale Of VW Investing Up To $5B' | Benzinga
Rivian Automotive Inc. (NASDAQ:RIVN) has seen its stock surge following news of a substantial $5 billion investment from Volkswagen AG (OTC:VWAGY), prompting discussions among investors, including Tesla Inc. (NASDAQ:TSLA) bull Gary Black and investor Ross Gerber, about the rationale behind German auto giant’s strategic move.
What Happened: Black, a Tesla bull and the Managing Partner at Future Fund took to social media platform X to share his thoughts on the recent developments at Rivian. He wrote, “Some investors don't appear to get the rationale of VW investing up to $5B in .”
He pointed out that the $5 billion investment from Volkswagen could significantly expand Rivian’s total addressable market and provide VW with a substantial equity stake in the EV industry’s second-best and least leveraged brand.
Black also noted that Rivian’s software is generally considered inferior to Tesla’s, but the investment could still drive Rivian’s stock price up to $22 per share. Black highlighted that Amazon remains Rivian's largest shareholder with a 16% stake.
“I see stock going to at least $22/share if RIVN trades at even a 4.0x FY'24 EV/Rev multiple from 3.2x at RIVN's after-hours price of $18.20/share. TSLA trades at 5.9x 2024 EV/Revs,” Black wrote on X.