Over the years, major tech companies began relying on startups as buyout options. And if there was one startup whose acquisition potential always seemed to exceed its stock price, it was tranformative electric-truck company Rivian. The California-based carmaker, which is still tight-lipped about its plans for a market rollout, raised $173 million in its January 2018 initial public offering and went on to deliver a 66 percent profit to investors who were willing to bet on the company’s high technology and insane ambition.
But not every tranformer has a share price like Rivian’s — and that has stumped some investors, causing some to sell their shares. According to a report in The Daily Beast, the company’s stock finished up a massive 7 percent on Monday, although the company’s long-term stock surge may be over.
A January open letter from hedge fund executive Daniel Loeb to the Rivian team, which the Daily Beast has obtained, offered some damning descriptions of how investors have been treated by the company. Rivian officials responded to Loeb’s letter by reading his letter out loud in a conference call, where the company’s CEO, RJ Scaringe, labeled Loeb “over-confident, untrustworthy, and baseless.” The management team reportedly refused to answer many of Loeb’s questions regarding the company’s stock pricing and some of his criticism, especially about Rivian’s testing on the treacherous Mojave Desert and test-driving the company’s Transelec Network, which amounts to a $1 billion network of simulated highways and tunnels.
So what exactly were Loeb’s concerns? And were Loeb’s questions seriously answered? Perhaps Rivian would have some insight into what the company’s software-driven truck could really be able to do if it could begin testing in public next year.