Rivian stock outlook: Jim Lebenthal sees a 50% downside

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Nov 22, 2021
  • Jim Lebenthal says Rivian stock should be half of where it is right now.
  • Jon Najarian finds it unfair to compare Rivian with the legacy automakers.
  • Shares of the California-based EV startup fell another 13% on Monday.

The sell-off in Rivian Automotive Inc (NASDAQ: RIVN) continued on Monday, with shares down about 13% as investors recommenced taking profits after a blockbuster debut. But Cerity Partners’ Jim Lebenthal says the stock should tank another 50% from here.

Lebenthal’s bearish case for Rivian

On CNBC’s “Halftime Report”, Lebenthal revealed to have bought Rivian “puts” and reiterated it to be a case of the “emperor is not wearing any clothes”.

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For this stock to have a market cap greater than GM is nonsensical. This is a stock that should be well below $100 on a market valuation basis. Maybe that happens this week, or maybe it happens next year. But this stock doesn’t deserve to be at $100. It should be half of where it is right now.

Lebenthal’s bearish call on Rivian is based primarily on “timing”. Much like Jim Cramer, he believes the EV investors are a bit too optimistic on how long it will take the world to switch to electric vehicles.

Jon Najarian disagrees

On the contrary, Jon Najarian, who owns Rivian calls, said it was unfair to compare Rivian with the legacy automakers like Ford or General Motors.

When you look at the lack of the dealer network that takes the bulk of the profit and the pension issues that put more expense on top of the vehicles that legacy car manufacturers make, you’ll see that it’s not a fair comparison. Because if they didn’t have these issues, they’d be a lot higher too right now.

Last week, Ford Motor, which has a 12% stake in the EV startup, withdrew from plans of making a Rivian-powered electric vehicle, citing “complexity of combining Rivian’s electric architecture with Ford’s own software”.

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