Photo Credit: Richard Truesdell / CC BY-SA
Investing in popular companies that go public can be wildly profitable for investors in the first few months following the IPO.
Just take a look at what Beyond Meat Inc. (NASDAQ: BYND) did in 2019…
After opening to the public at $46 on its IPO date, the stock soared 420% to an all-time high of $239 per share just 85 days later.
GoPro Inc. (NASDAQ: GPRO) did the same thing in 2014…
After IPO-ing to the public for $24 per share, the stock popped 308% to $98 just 96 days later.
Since making those all-time highs just three months after their IPOs, however, shares of each company are now down considerably.
BYND is down 40% and GPRO has dropped an astounding 90% to date.
That’s likely because the “lockup period” that allows institutional shareholders to sell their positions typically expires 90 days after the IPO date of any new stock.
And since some of the largest institutional investors in both BYND and GPRO were hedge funds looking to make a quick buck – they sold for fast profits and never looked back.
But the up-and-coming electric car maker, Rivian, is a completely different story…
This company has some of the best long-term institutional investors a company could ask for.
Not only do I expect Rivian to experience money doubling or tripling gains in the first three months after its IPO, I don’t think the stock will experience a sharp decline afterwards like BYND or GPRO.
That’s because its institutional shareholders are in it for the long-haul and thus unlikely to sell after the 90-day lockup period…
Should You Buy the Rivian IPO?
Yes.
In case you’re unaware, Rivian makes electric pickup trucks set to rival Tesla Inc.’s (NASDAQ: TSLA) Model X and Cybertruck.
The company’s futuristic R1T all-electric pickup truck promises over 400 miles of driving range combined with acceleration times comparable to a supercar. And its R1S SUV does the same.
Rivian last raised money in December 2019, when its high-profile investors valued the firm at $7 billion.
And those institutional investors are what make Rivian such an intriguing long-term buy and hold after its IPO…
You see, Rivian has strategically aligned itself with firms that have a history of investing for the long run…
T. Rowe Price Group has invested $1.3 billion, Ford Motor Co. contributed $500 million, and Amazon.com Inc. has allocated $700 million so far.
What’s more… Not only are Jeff Bezos and Amazon investors in Rivian… They’re also a major customer.
That’s right.
After Bezos visited Rivian’s headquarters last fall, he inked a deal to buy 100,000 electric vans for Amazon’s delivery services.
And that 100,000 could quickly turn into 1 million as Amazon is working towards becoming delivery self-sufficient and carbon neutral by 2040.
Rivian clearly has a bright future ahead…
But since the company’s not public yet and is only raising money from long-term institutional investors in the private markets until it does go public… You’re going to have to wait for the Rivian IPO to invest.
I’ll keep you updated when that’s close to happening. But for a moment, just imagine if you were able to invest in Rivian before it went public… If you were able to get in on its most recent $7 billion private round valuation and the stock grew to half the size of Tesla’s $180 billion market cap, you’d be looking at 1,185% gains.
Sponsored
Bloomberg projects it to “skyrocket 1,000 times over.” And best of all…
The tiny, little-known stock behind the “Tesla Killer” are trades for just a few bucks.
Don’t wait another moment.
Now you can lock in its shares at a few dollars, instead of $300 like Tesla.
