The Market News Reel for this week! Get the most important market news & updates for the week ahead each Monday!
Major headlines, excerpts from news sources and a link to the full article are shown below. "Breaking Thoughts" section is purely our opinion.
Rivian Valued Up to $65B in IPO, Sees 1,000 Deliveries this Year
"Electric vehicle start-up Rivian Automotive raised the expected IPO price of its shares on Friday.
Rivian now plans to offer 135 million shares priced between $72 and $74, up from $57 to $62, according to an updated securities filing. At the top end of that current range, and assuming underwriters exercise an option to purchase 20.25 million additional shares, Rivian would be worth more than $65 billion.
The rich valuation would mean Rivian is only slightly less valuable than traditional automotive giants like GM and Ford, which holds a stake greater than 5% in Rivian. The company has never recorded any material revenue, and expects at most to generate $1 million in revenue in the quarter ended Sept. 30, according to its filings. It lost $994 million in the first six months of the year." - read more on CNBC here
Breaking Thoughts: This will be among the top 20 IPOs in history if they raise manage to raise $10 Billion. But, at the same time the valuation is quite massive for a company that is hoping to deliver just 1,000 vehicles this year.
For context, Tesla (TSLA) traded at a value around $30-45 billion for the years of 2017-2019, while delivering 10s of thousands of cars and earning billions in revenue each year. Tesla can currently produce ~800,000 cars per year.
Rivian, Lucid and other EV startups have a long way to go before reaching those types of production levels.
Rivian is backed by a 20% stake from Amazon as well a smaller stake from Ford. Part of their valuation comes from Amazon's order for 100,000 EV delivery trucks as part of its go green strategy. Investors should weigh the current valuation against their execution risk as they are now extremely well funded.
Musk Teases Potential Stock Sale, lets Twitter Vote on $21B
"Elon Musk’s social media followers have spoken: The Tesla Inc. chief should sell 10% of his stake in the electric-car maker.
A majority of 3.5 million Twitter users said they’d support the move in a poll that Musk launched Saturday when he floated the idea of selling the stock, which is valued at about $21 billion based on 170.5 million Tesla shares he holds. Musk had said he would “abide by the results of this poll, whichever way it goes.”
The poll closed shortly after 2:15 p.m. Sunday in New York, with about 58% of respondents backing the idea of the sale." - read more on BNN Bloomberg here
Breaking Thoughts: Elon already had a huge nearly 23 million ~$6.00 strike employee stock option award from 2012 expiring soon. His choice is between letting them expire worthless (essentially giving up over $25 billion), or to exercise them and pay full 53% income taxes ($12.5 Billion) on the amount.
But, Elon is famously "cash poor". He invested all of his Paypal money into Tesla & SpaceX. To fund his philanthropy (Open AI & the $100M climate prize) and side bets (like Boring co & Neuralink) he has relied on a ~$1 Billion loan against his ownership stakes. So, he doesn't have $12.5 billion laying around to pay the tax.
This means that if he is to attain his stock options he must immediately sell half of them to pay the Tax or raise funds some other way (such as debt, but that would leave him with $100s of millions in interest payments each year)... Well he let the good people of the internet decide and they have spoken!
Elon created a third option for himself, by letting the people decide if he should sell 10% of his current 170 million shares. So, selling 17 million of them at the current price would get him $20 billion in cash and force him to pay the capital gains tax of 24% or $4.8 billion, leaving him with $15.2 billion in cash and 153 million shares. But, he will them be able to exercise is 23 million employee stock options AND pay the $12.5 Billion income tax.
So, Elon will have 176 million shares of Tesla (~6 million MORE than he has now), will not take on any new debt, will also have $2.7 billion in cash left over, while having paid $17.3 billion in taxes.
Major Earnings This Week
Monday November 8:
Roblox (RBLX): Expected Q3 earnings of $-0.14 per share
The Trade Desk (TTD): Expected Q3 earnings of $0.15 per share
Virgin Galactic (SPCE): Expected Q3 earnings of $-0.28 per share
Tuesday November 9:
DoorDash (DASH): Expected Q3 earnings of $-0.26 per share
Nuvei (NVEI): Expected Q3 earnings of $0.36 per share
Palantir Technologies (PLTR): Expected Q3 earnings of $0.04 per share
Paypal (PYPL): Expected Q3 earnings of $1.07 per share
VROOM (VRM): Expected Q3 earnings of $-0.73 per share
Wednesday November 10:
CGI (GIB): Expected Q4 earnings of $1.35 per share
Endava (DAVA): Expected Q1 earnings of $43.03 per share
Opendoor Technologies (OPEN): Expected Q3 earnings of $-0.17 per share
Root (ROOT): Expected Q3 earnings of $-0.68 per share
Disney (DIS): Expected Q4 earnings of $0.51 per share
Wendy's (WEN): Expected Q3 earnings of $0.18 per share
Thursday November 11:
CAE (CAE): Expected Q2 earnings of $0.19 per share
Coupang (CPNG): Expected Q3 earnings of $-0.15 per share
Docebo (DCBO): Expected Q3 earnings of $-0.06 per share
Friday November 12:
Astrazeneca (AZN): Expected Q3 earnings of $0.62 per share
Greenpower Motor (GP): Expected Q2 earnings of $-0.08 per share
Major IPOs Expected This Week
Wednesday November 10:
Rivian (RIVN) electric vehicle maker is raising up to $9.9B at a $65B valuation
See you next week!
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