Posted on 07/06/2023 11:28:44 AM PDT by MeneMeneTekelUpharsin
July 6 (Reuters) - A federal judge said Rivian Automotive (RIVN.O) must face a lawsuit claiming it defrauded shareholders during and after its blockbuster 2021 initial public offering by concealing that had underpriced its electric vehicles, leading to unpopular price hikes.
U.S. District Judge Josephine Staton in Los Angeles said shareholders could try to prove that Rivian, which is not profitable, knew it would have to raise prices on its R1S SUV and R1T pickup truck because of higher materials costs, to avoid even bigger losses. Rivian's share price slid 39% over 10 days after the Irvine, California-based company on March 1, 2022 raised the R1S price to $84,500 from $70,000 and the R1T price to $79,500 from $67,500, angering customers on social media and elsewhere.
The company backtracked two days later, saying customers who pre-ordered vehicles before March 1 would not face the higher prices. RJ Scaringe, Rivian's founder and chief executive, apologized and told customers "we broke your trust." In her July 3 decision, Staton called the alleged higher costs a "major obstacle to profitability unique to Rivian," not merely a "garden-variety" problem.
"The inference that Rivian senior executives knew that the (bill of materials) cost for each R1 EV exceeded its retail price by approximately $40,000 leading up to the IPO is far more plausible than the inference that those executives were in the dark about the issue," Staton added.
(Excerpt) Read more at reuters.com ...
A scammer scamming scammers.
But, a lot of investment money got sunk into bad ideas. just like this nonsense of electric cars.
Stock is headed to 30 by the end of summer. Blackrock CEO says you have to force change and they are a huge mover. So.. Watch or participate, either way you can’t change a thing. This is all part of circle the wagons and protect the family.
My RIVN options are up over 400%. i have a string of them going out to September and will be closing them periodically.
The share price went up because they delivered about 50% more vehicles than they projected. (I suppose you could accuse them of low-balling projections in order to manipulate their results, too).
I don’t know the details of this case, but I do know it takes years to design and commercialize a car... and by the time Rivian started making deliveries there was a worldwide pandemic, supply chain problems, labor shortages, and high inflation for producers. When, exactly, should they have announced the price hikes?
I agree the stock is ultimately headed higher... It was a good buy in the teens. Not sure about your time frame for $30 this summer but it’s possible. It seems likely that at some point if they don’t slow the cash burn rate they are going to have to raise more capital. That could cause some friction on the upward momentum of the stock price. But it could break $30 or even higher before that happens if they start bringing in more free cash flow.
Their front end looks like some futuristic retarded anime robot from Japan. Dunno why anyone would buy one just from that!
The stock price skyrocketed on next-to-nothing news. Production is way up, but sales are not up. Someone is putting big money into Rivian succeeding, no matter what.
I just got a deal on a 2013 Toyota Tacoma, one owner, low miles, well maintained. I will probably never need to buy another vehicle. EV’s are the compact fluorescent light bulbs of cars.
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