Rivian Automotive (RIVN -0.77%) stock soared more than 8% in early trading on the Nasdaq this morning. (Hurray!)
Then its stock turned tail, gave back most of its gains, and as of 10:30 a.m. ET, it was up only 1.6%. (Boo!)
Why did Rivian stock rise and then fall back again? The answer is just one word: Apple (AAPL 0.38%).
Rivian and Apple: A match made in heaven? (Or perhaps Detroit?)
So, here’s the big news today about electric truck company Rivian and tech titan Apple: DigiTimes Asia reported today that Apple has been “exploring collaboration” with Rivian. The problem is that this rumor is primarily based on sources within the companies’ supply chains and not directly from either Rivian or Apple. It also implies that the “collaboration” in question could be as limited as Rivian putting Apple CarPlay technology in its electric trucks and vans.
That’s a far cry from, say, Apple lending its financial heft to Rivian as an alternative to Apple building its own electric car (a project that’s now been canceled) or Apple deciding to buy Rivian outright (another rumor from earlier this year, which never materialized). Ultimately, MacRumors.com concludes that this latest rumor is “very speculative.”
Is Rivian stock a buy?
In other words, you can probably ignore this particular rumor — which, in fact, seems to be what investors are doing now after initially getting pretty excited over it.
Unfortunately, this leaves Rivian investors owning the exact same stock they owned yesterday: a stock with less than $4.5 billion in net cash on its balance sheet, but that’s burning cash at nearly $6 billion a year. A stock that won’t introduce its new R2 electric SUV until 2026 — if the company survives that long. And a stock that just announced that the electric trucks it does have available for sale will grow their sales exactly 0% this year.
Call me skeptical, but doesn’t sound like much of a growth stock to me.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.
