Buying and selling: what investors can learn from both Tesla and Rivian

With a market capitalization of more than $ 100 billion, larger than GM and Ford, it would be difficult to say that the electric car is not a big success as the Rivian shares are under pressure. From all the noise on Elon Musk’s sale of Tesla shares to former Tesla CEO Peter Rawlinson’s Lucid Group, which went public earlier this year and is valued at over $ 80 billion, as big as Detroit stalwarts, purchases and action sales in EV products have recently been heated.

As the stock market faces new challenges after Governor Joe Biden re-appointed Jerome Powell to head the Federal Reserve, leading to market calls that investors are almost turning into value stocks and out of the hottest growth names ahead of interest rate pressures, Tesla’s competitors have been given back some benefits. Are EV products a bubble?

CNBC recently spoke with Nick Colas, co-founder of DataTrek Research and a former Wall Street fitness industry analyst, about what is happening in the EV space.

Rivian and what makes the market emerge

The Rivian price is higher, according to Colas. “There is no searching around that. “Whenever you talk about a company that has not sold any product yet and is worth $ 100 billion it is a big deal, but not necessarily a bubble,” he said.

Tesla itself did not have a $ 80 billion-plus market share until early 2020, Colas noted in a recent research note, and then, it produced 100,000 cars in the quarter. Rivian is starting to roll out its first customer cars right now.

Recent investor opportunities in EV markets and their valued interests reflect a fraction of what is causing a bubble: a mismatch between a specific investment supply demand and demand. Market bubbles can grow when more money is put into action in a particular area that is short on supply. Overall, Colas is not worried about the stock market bubble that has been erupting anytime soon because the liquidity in our market is high, as housing banks will continue to chase market opportunities. But within the long-term EV history, there is the fact that investors are chasing the few names that are available to them.

“Investors are looking for any possible profit in automobiles and EVs and there is a shortage of space, and that is why a Tesla or Rivian is very important. Because EV stocks are not enough there, ”Colas said. “You have to provide the product with what you want, or you create bubbles to a certain extent.”

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