On November 11, 2021, Turbo Trading's Head Trader Robert Knight, MBA, takes a look at stock $RIVN. He discusses how, while the capital gain on this stock may be appealing until $RIVN developed a chart pattern it is too risky to trade. A transcript is below the video.
This is just a quick video on the potential here for $RIVN. This is the new issue, Rivian automotive. The question was asked, what did I think about it at this level $116, perhaps as an entry-level, triple topped up here at $124, making new highs, an all-time high. I mean, it's only two days old.
But it did the trade up to $124 and now backing off. Now they did this financing at $74 and it has approximately 785 million class A's outstanding. So, what was done at $74, so that's 50- that's a 70% increase from the underwriting. This company has minimal sales. Great idea.
But same market cap as general motors. So would I be a buyer at this level? I don't think so because I mean every dollar move, every $1.50 move in the stock, adds or subtracts a billion from market cap. So what's the upside to it. No sale in a minimal sales. And already at the market cap of general motors and greater than four.
So, you know, you always have to keep that in mind when you're looking at these stocks, was it a trade this morning or yesterday when it first opened? Sure. If you want to just day trade it and look for, you know, an entry up, but to buy the stock, to hold at this price level. There's going to be a lot of resistance for it now. I mean, who wouldn't want to take a 50% or 70% capital gain, on a stock that just opened yesterday. Now they probably are in it for 30 days. So far, the institutions that bought, I'm not saying that the institutions are going to dump it, but you know, they're going to be letting go of a piece of it, for sure.
And because unlike, maybe the retail trader that is all excited about and things that can go a lot higher. You know, this is a huge market cap, huge float. Now it's traded 65 million today. So it’s liquid, there's no doubt, but you know, it's the greater fool than I am theory.
These people that bought it at $125, who they're going to sell it to, who's going to take it off their hands by, you know, at say $130, adding another three or 4 billion to market cap, or $135 adding another 7.5 billion to market cap. I think it has to come back. I think comes down from this level. I wouldn't be looking to hold this overnight.
If you want a day, trade it or, you know, try and scalp it that's fine, but I wouldn't be looking to hold this thing any for any period of time. Until it develops a chart pattern. For now, there's a lot of risk in this stock.