Buy Rivian Stock Ahead of the Squeeze? Not So Fast

InvestorPlace04-23

Rivian (RIVN) has continued to hit new all-time lows this month, but a short-squeeze for shares is very possible. However, this is hardly a reason to make this fledgling EV play a long-term buy at ...

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Not So Fast\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-23 18:50 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://investorplace.com/2024/04/buy-rivian-stock-ahead-of-the-squeeze-not-so-fast/><strong>InvestorPlace</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Rivian (RIVN) has continued to hit new all-time lows this month, but a short-squeeze for shares is very possible.\nHowever, this is hardly a reason to make this fledgling EV play a long-term buy at ...</p>\n\n<a href=\"https://investorplace.com/2024/04/buy-rivian-stock-ahead-of-the-squeeze-not-so-fast/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0823411888.USD","symbol_name":"法巴消费创新基金 Cap","start_time":0,"source_url":"https://investorplace.com/2024/04/buy-rivian-stock-ahead-of-the-squeeze-not-so-fast/","article_id":"2429116770","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2429116770","pubTimestamp":1713869400,"sourceInfo":{"source_id":"investorplace_stock_picks","name":"InvestorPlace stock picks"},"weMediaInfo":null,"summary":"It's hardly a lock that Rivian stock has finally bottomed out, even as there's a strong possibility of a short squeeze down the road.","collect":0,"end_time":0,"defaultTopTitle":"investorplace.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0823411888.USD":"法巴消费创新基金 Cap","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","LU1435385759.SGD":"Natixis Loomis Sayles US Growth Equity RA SGD-H","LU1551013342.USD":"Allianz Income and Growth Cl AMg2 DIS USD","LU0082616367.USD":"摩根大通美国科技A（dist）","BK4581":"高盛持仓","TSLA":"特斯拉","LU0056508442.USD":"贝莱德世界科技基金A2","LU2357305700.SGD":"Allianz Global Artificial Intelligence ET H2-SGD","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","LCID":"Lucid Group Inc","LU1839511570.USD":"WELLS FARGO GLOBAL FACTOR ENHANCED EQUITY \"I\" (USD) ACC","LU1914381329.SGD":"Allianz Best Styles Global Equity Cl ET Acc H2-SGD","LU1429558221.USD":"Natixis Loomis Sayles US Growth Equity RA USD","LU2249611893.SGD":"BNP PARIBAS ENERGY TRANSITION \"CRH\" (SGD) ACC","IE00BSNM7G36.USD":"NEUBERGER BERMAN SYSTEMATIC GLOBAL SUSTAINABLE VALUE \"A\" (USD) ACC","LU0234572021.USD":"高盛美国核心股票组合Acc","BK4548":"巴美列捷福持仓","FAST":"快扣","LU0820562030.AUD":"ALLIANZ INCOME AND GROWTH \"AMH2\" (AUDHDG) H2 INC","BK4104":"贸易公司与经销商","LU2063271972.USD":"富兰克林创新领域基金","LU0823414478.USD":"法巴经典能源转换基金","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","RIVN":"Rivian Automotive, Inc.","BK4592":"伊斯兰概念","LU0466842654.USD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"A\" (USD) ACC","LU2087621335.USD":"ALLSPRING GLOBAL FACTOR ENHANCED EQUITY \"A\" (USD) ACC","LU0689472784.USD":"安联收益及增长基金Cl AM AT Acc","LU2326559502.SGD":"Natixis Loomis Sayles US Growth Equity P/A SGD-H","LU1852331112.SGD":"Blackrock World Technology Fund A2 SGD-H","BK4534":"瑞士信贷持仓","BK4585":"ETF&股票定投概念","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","LU1861215975.USD":"贝莱德新一代科技基金 A2","LU0316494557.USD":"FRANKLIN GLOBAL FUNDAMENTAL STRATEGIES \"A\" ACC","LU1548497426.USD":"安联环球人工智能AT Acc","BK4533":"AQR资本管理(全球第二大对冲基金)","LU1861220033.SGD":"Blackrock Next Generation Technology A2 SGD-H","LU0820561818.USD":"安联收益及增长平衡基金Cl AM DIS","LU1551013425.SGD":"Allianz Income and Growth Cl AMg2 DIS H2-SGD","LU2602419157.SGD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"AC\" (SGD) ACC","LU2756315318.SGD":"ALLIANZ INCOME AND GROWTH \"AMG\" (SGDHDG) INC A","BK4527":"明星科技股","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","LU1720051108.HKD":"ALLIANZ GLOBAL ARTIFICIAL INTELLIGENCE \"AT\" (HKD) ACC","BK4588":"碎股","LU0234570918.USD":"高盛全球核心股票组合Acc Close","BK4574":"无人驾驶"},"translate_title":"在紧缩之前购买Rivian股票？没那么快","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"TSLA":1,"RIVN":1,"FAST":1,"LCID":1},"content_text":"Rivian (RIVN) has continued to hit new all-time lows this month, but a short-squeeze for shares is very possible.\nHowever, this is hardly a reason to make this fledgling EV play a long-term buy at current prices.\nDespite temporary increases, persistent factors suggest long-term declines for Rivian stock.\n \n\n\n\n \n\nSource: Tada Images / Shutterstock.com\n\n\n\nSo far this month, Rivian Automotive (NASDAQ:RIVN) shares have continued to hit new all-time lows. However, I’ll admit that a move to higher prices may be in the immediate future for Rivian stock.\nMostly, because the ingredients are in place for shares in this fledgling EV upstart to experience a short-squeeze. Yet while the possibility of a short squeeze could serve as a warning to anyone looking to join the crowded short side by making a bearish RIVN wager, it’s not exactly a sign that now’s the time to “buy the dip,” and enter a long-term long position.\nKey factors driving Rivian into the stock market junkyard in the first place continue to persist. This indicates that shares will hit even lower lows from here.\nRivian Stock and its Recent Squeeze Appeal\nI don’t have to tell you that electric vehicle stocks have fallen out of favor with both main street and Wall Street investors. Because of headwinds like weak demand growth and falling profit margins related to competition, high and low-quality EV stocks alike remain under pressure.\nEven so, that may not stop Rivian stock from bouncing back again pretty soon. At least, that’s the view of UBS’s Joe Spak, who last week upgraded RIVN from “sell” to “hold,” and gave it a $9 per share price target. \nIn Spak’s view any sort of positive news, like updates on Rivian’s planned R2 line of lower-priced vehicle models, will squeeze RIVN higher.\nIt’s tough to disagree with the analyst’s recent take. Again, the short side with Rivian is very crowded. Around 18.5% of Rivian’s outstanding float has been sold short. Moreover, the company may be weeks away from unveiling promising R2 updates.\nRivan next reports earnings post-market on May 7. So, this sounds like a possible winning trade in the making, right? Not quite. Before deciding to fade the RIVN skeptics, by going long ahead of earnings, keep the following in mind.\nA Risky Wager, in Both the Short and Long-Term\nIt’s possible that upbeat guidance/updates causes Rivian stock to surge after May 7. Then again, maybe not. RIVN could still sink after this upcoming earnings release. How so? For one, consider the current sentiment about EV stocks.\nIn today’s environment, even Tesla (NASDAQ:TSLA) is getting the market’s cold shoulder. The “Magnificent Seven” has become the “Magnificent Six,” and it’s clear who didn’t make the cut. \nWithout a market less willing to focus on future potential rather than current headwinds, investors in turn could focus more on the negative aspects of the earnings release.\nFor instance, the company’s profitability, or lack thereof. Previously, I pointed out how Rivian has assuaged cash burn worries by implementing cost-saving measures. However, even with these cuts, according to a forecast from Evercore ISI’s Chris McNally, total cash burn through 2025 may come in at around $4.5 billion.\nThe latest earnings/outlook may end up suggesting that cash burn will exceed this figure. Shares could, in turn fall, ahead of an increased likelihood of additional shareholder dilution. Speaking of dilution risk, this remains a key factor why RIVN could keep on dropping over a longer time frame.\nBottom Line: No Matter Your Rationale, Steer Clear of Rivian Stock\nLower-than-expected EV adoption has been a massive reason behind RIVN’s epic price decline since debuting at $78 per share back in late 2021. However, just as large of a factor has been Rivian’s heavy cash burn, which has resulted in the company selling newly issued shares and shareholder dilution.\nRivian had around $9.4 billion in cash on hand as of Dec. 31, 2023, yet this may not be enough to sustain the company until it reaches profitability. Remember that the R2 catalyst may not have an impact until 2026.\nWith this, Rivian is also at risk of spiraling to even lower prices, because of dilution, delay, and disappointment, much like the situation with Lucid Group (NASDAQ:LCID), although to a less-severe extent.\nNo matter whether you’re considering Rivian stock as a short-term squeeze trade, or as a long-term bottom-fisher’s buy, staying away is the better choice.\nOn the date of publication, Thomas Niel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.\nThomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.Consumer Discretionary, Automotive, Electric Vehicles \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nSubmit\n\n\n\n\n\n\n\nArticle printed from InvestorPlace Media, https://investorplace.com/2024/04/buy-rivian-stock-ahead-of-the-squeeze-not-so-fast/.\n©2024 InvestorPlace Media, LLC","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2429116770"}