Rivian’s shares soared 29% on their first day of trading. A Tesla killer?

Spark Global Limited reports:

Ken Griffin, founder of Citadel Investment Group, said he was shocked that Mr Musk had let Twitter users vote on whether to sell his 10 per cent stake in Tesla. Griffin said:

“I never thought we would let a Twitter vote determine our ownership. We live in a completely different world.”

Tesla shares tumbled for two days after Mr Musk’s Twitter “poll” and, despite recovering on Wednesday, ended the week down about 13% at $1,067.95.

Griffin said he would like to see the company controlled by its founder, rather than a tax policy that would drive “great entrepreneurs” like Musk out of his company. He said the government should choose between tax policy and “innovation”.

But some argue that a fall in Tesla’s stock price makes sense.
On Tuesday, Michael Burry, the original “Big Short” character, suggested in a deleted tweet that Tesla’s stock could plummet 90%. He contrasted Tesla with Amazon, whose stock plunged during the dot-com bubble and only soared years later when it transformed its business.

Musk himself said last year that Tesla’s stock was too high, Berry noted. On a split-adjusted basis, the stock was trading at less than one-sixth of its current price.

Berry shorted Tesla in late 2020, asserting in February that it would end the overhyped Tesla mania if the stock fell below $100. His fund held put options on Tesla shares until June 30.

Now, tesla seems to be facing a new challenge from its peers.

On Wednesday, BMW Group CEO Oliver Zipse took a jab at Tesla, saying the difference between BMW and Tesla is quality and reliability. This is the second time this year that Ziptzer has publicly mocked Tesla.

In February, Ziptzer cast doubt on Tesla’s ability to retain its position as the electric car champion in the race. But since then, demand has continued to grow, and in September the Tesla Model 3 became the best-selling car in Europe. Ziptzer says:

“Tesla is not at the top end of the market and they have achieved very strong growth by cutting prices. We’re not going to do that because you have to go the whole way.”

In addition to the challenge from established car companies, Rivian, a newly listed electric car company known as the “Tesla killer”, is also on the offensive.

Rivian listed on Nasdaq on Wednesday, starting trading at $106.75 a share, up about 37 per cent from its $78 IPO price and extending intraday gains to more than 50 per cent at one point, giving it a market capitalisation of $98bn at its peak, larger than that of GENERAL Motors and Ford.

But Cathy Wood, founder of Ark Investments, said at a conference that her fund would not buy Rivian because it was overvalued.

Wood’s stance surprised many, as she has long been known for betting on highly valued tech companies, and Rivian is still in the early stages of generating consistent profit streams. In addition to Tesla, two other electric car companies received Ark’s investment before they were profitable.

While Rivian has reportedly received more than 50,000 orders for its luxury electric trucks, which start at around $70,000, the company has delayed deliveries of those vehicles until early 2022 due to supply chain and quality issues.

Mr Musk also mocked Rivian’s valuation in August, saying the company should deliver at least one car for every $1bn of its valuation before its IPO.

In October Mr Musk again took a swipe at Rivian and Lucid, another electric car start-up, saying they were valued at tens of billions of dollars without delivering a single car.

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