Why do Lithium battery and electric car stocks seem to consistently start high and taper hard?
I've been taking a deep dive into the electric car and lithium battery industries in hopes of finding solid investment opportunities, and I've come across a consistent trend. Many of these companies spike massively when they go public, and ultimately come crashing down to a seemingly endless flat streak at penny stock values. Examples of this include Rivian (RIVN), Nikola (NKLA), and a battery manufacturer Microvast (MVST).
Understandably, electric vehicles is a hard industry to break out in, especially here in the US where adoption of the technology and infrastructure has been underwhelming, and there is a singular giant already filling much of the space that these companies are vying for.
What I'm confused about, is why do these companies fall so flat? They obviously aren't Tesla and aren't enjoying success to the same degree that Tesla does, but at least in my area, Rivian vehicles are a regular sight. Nikola just got a pretty solid deal to sell 30+ trucks to a major US trucking company, and Microvast is one of the only companies of its kind with a real marketable product.
How is it that these companies can trade so low compared to their industry leader? What is it that I'm missing? These companies certainly aren't as strong with their youth and associated hardships (such as debt) but these seem to have been undervalued for years with no sign of relief. $Rivian Automotive, Inc.(RIVN)$ $Nikola Corporation(NKLA)$ $Microvast Holdings, Inc.(MVST)$
RIVN
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They are heavily shorted for a logical point that irrespective of good developments, their earnings will support their lower price point and that's what shorts leverage.
Example Nikola got many noticeable developments this year and its slightly different from ev segment, despite shorts kill that rally and took away the profits successfully. Multiple factors helped them, overall bear market, lower earnings (due to pandemic/war etc).
But on the brighter side this presents a big opportunity for a long investor. you just need good trust in a company biz model/financials and need Patience. Rewards will be sky rocketing. Example I have 122% Ror YTD, all coz of above value investing and patience. And these profits are still nothing in comparison to when the actual bull mkt starts.