RIVN - Rivian: Volkswagen Deal Is A Game Changer

2024-06-26 10:52:15 ET

Summary

• Rivian Automotive, Inc. shares surged up to 50% after it announced that Volkswagen would invest $5.0B into the EV start-up.
• The Volkswagen deal significantly reduces liquidity and ramp-up risks for Rivian.
• Despite challenges in the EV market, Rivian remains a highly promising and well-capitalized investment opportunity in the electric vehicle market.

Shares of electric vehicle ("EV") company Rivian Automotive, Inc. ( RIVN ) soared up to 50% in the after-hours market on Tuesday after it announced that Germany-based Volkswagen (VWAGY, VLKAF) would invest $5.0B into a joint venture with the purpose to share EV architecture and software. Rivian Automotive obviously here is a big winner as the electric vehicle company is pressured by mounting losses as it is scaling its production into a weak market. The $5.0B investment will extend the company's liquidity run-way significantly and also limits investment risks, which is a game changer for investors that have become concerned with the company's losses and cash burn. I believe the deal is a very favorable development, especially with the EV market making negative news lately with the bankruptcy of Fisker!...

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