Track shipments

Ambitious roadmap should put RIVN Stock on the fast track

Would you believe that the shares of the Californian company Rivian Automotive (NASDAQ:BANK) just traded below its IPO price? It’s true, and this fact might scare some traders away from RIVN stocks.

Credit: Michael Vi/Shutterstock

Granted, it’s sometimes a bad sign when stocks fall below their IPO prices. On the other hand, the drop in RIVN shares could also represent a prime buying opportunity for enterprising investors.

Do not mistake yourself. RIVN stock isn’t for everyone as Rivian isn’t liked on Wall Street, and the company certainly isn’t the only electric vehicle (EV) startup.

Still, despite fierce competition in the electric vehicle industry and falling share price, Rivian’s business appears to be growing. Indeed, there may be a lag if RIVN stock price is low even as Rivian marks milestones and continues to invest in EV technology.

A Closer Look at RIVN Actions

On November 9, 2021, Rivian priced its IPO at $78 per share. This price was above the pre-announced $72-$74 IPO range, which had already been raised. Shares of the company officially opened for public trading at $106.75 on November 10.

Surprisingly, after Rivian went public, RIVN stock rose for five consecutive trading days. On November 16, its stock price reached $179.47.

It was all downhill from there unfortunately. The problems began on Nov. 17, when Rivian shares fell 18% in a single trading session.

Fast forward to January 20, 2022, and RIVN’s stock price was below $70 and therefore below its IPO price.

Is this a problem or an opportunity? Optimists might view the situation as a second chance to buy Rivian shares at a very reasonable price.

Of course, not everyone is optimistic about Rivian. So let’s see if we can convert some skeptics into believers.

Big factories, big ambitions

In order to meet the high demand for clean energy vehicles, car manufacturers must have the necessary production infrastructure.

Fortunately, Rivian is taking into account the demand for more and better vehicle production capacity in 2022. On the one hand, the company plans to increase the annual production capacity of its Normal, Illinois plant, of 150,000
to 200,000 vehicles.

Yet that plant could be overshadowed by Rivian’s second US production plant that is currently under construction. The company says it is investing $5 billion in this Atlanta site which is on the verge of becoming a “carbon-conscious campus”.

If all goes as planned, this “campus” will eventually employ more than 7,500 workers and will be able to produce up to 400,000 vehicles per year.

This development is exciting, but Rivian stakeholders will need to be patient. While construction of the facility is expected to begin this summer, it is not expected to start producing electric vehicles until 2024.

Major milestones

Some people might consider registering on the Nasdaq exchange as a notable achievement for Rivian, and they might be right about that.

However, that’s not Rivian’s only recent milestone worth noting. In a recent press release, the automaker said it had successfully passed the production barrier of 1,000 vehicles before the end of 2021.

To be more specific, Rivian produced 1,015 vehicles in 2021. Additionally, the company delivered 920 vehicles last year.

On top of all that, Rivian reported a million dollar milestone that suggests the company could become a sales juggernaut.

“With our first customer deliveries of 11 R1Ts, we generated total revenue of $1 million for the three months ended September 30, 2021,” Rivian said in a letter to its shareholders.

The essential

If your only focus is the momentum in RIVN stocks, you might be deterred from taking a bullish position in the stock.

There’s more than one side to every story, though. The stock drop could represent a chance to invest in the electric vehicle maker at a significant discount.

Additionally, Rivian is a growing company with bold ambitions. So feel free to consider taking a bullish position in RIVN shares.

As of the date of publication, David Moadel had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.