PreMarket Prep Stock Of The Day: Rivian

Many shorter-term traders are always looking for the “hot stock” of the day, usually one that's moving off a news catalyst, to trade for the upcoming session.

Sean Udall, tech stock strategist and the publisher of The Udall Report, joined the PreMarket Prep Plus show Friday to discuss one such issue,
Rivian Automotive Inc RIVN, from a shorter and longer-term perspective.

Rivian And Its IPO: Rivian designs, develops and manufactures electric vehicles and accessories. The issue debuted on Wall Street in November, with its first print being $106.75, and ended that session at $100.73.

Over the next four sessions, it miraculously rallied to $179.47 and backed off to end the session at $172.01. Since reaching that ridiculous level, it has been in a freefall. On Thursday, Rivian posted its all-time low ($39.77) and all-time closing low ($41.06).

Rivian's Q4 Report: After the close on Thursday, Rivian reported quarterly losses of $2.43 per share, which missed the analyst consensus estimate of a loss of $1.97 by 23.35%. The company reported quarterly sales of $54 million, which missed the analyst consensus estimate of $60.03 million by 10.04%,

The company forecast FY22 vehicle production of 25,000, with an adjusted EBITDA loss of $4.75 billion and capital expenditures of $2.6 billion. 

For the quarter, the company delivered only 909 vehicles.

Udall's Long-Term Take On Rivian: Udall discussed the original IPO pricing of $78, which steadily increased from the preliminary pricing in the $40-$45 range. In his opinion, those who missed out on the initial allocation chased the shares in open and pushed the level to unsustainable levels.

From strictly a price perspective, he stated: “If you liked it from the IPO at $78, why wouldn't you love it now?”

He concluded that the company is still backed by Amazon.com, Inc. AMZN and should continue to be well-funded.

Udall's Short-Term Take On Rivian: When the issue was being discussed on the broadcast, it was trading at the $37.50 area.

“I may take a look at this today. I wish I had participated in the premarket," the strategist said. 

“It was tempted at the $35-$36 area, for the simple reason that it was at a steep discount to its original IPO.”

From the after-hours and premarket price action, the author of this article noted a patient buyer who was initially at the $35 area, then the $36 area and eventually moved up to the $37 area heading into the open.

The question for the regular session is whether buyers will step to $38 or just scalp out of the shares they previously purchased. 

RIVN Price Action: After an opening print at $38.32 Friday, Rivian immediately bottomed at $38 and resumed its move higher. Interestingly, the rally came to an abrupt end, only 16 cents shy of its closing price from Thursday ($41.16), and reversed course.

The stock was down 7.07% at $38.25 late in Friday's session. 

The discussion on the issue from Friday’s show can be found here: