Rivian stock jumps on $5B Volkswagen investment

Shares of Rivian Automotive (RIVN) jumped following the market close on Tuesday after Volkswagen (VWAGY, VOW.DE) announced it would invest up to $5 billion as part of a joint venture.

Yahoo Finance reporter Pras Subramanian joins Market Domination Overtime to discuss Rivian's latest developments and what they could mean for the company moving forward.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.

This post was written by Nicholas Jacobino

Video transcript

Rivian shares are surging after hours as it look gets a hefty investment from Volkswagen.

Here are the details Yahoo finances senior reporter, pro Superman.

This happening just as you are, basically, just as you are walking to set, um, this may this announcement made in a tweet or an or a post on X, right?

Right with the CEO RJ scarring talking about how, uh, him and Oliver Bluman, the CEO of Volkswagen, sort of made a deal here to to create a joint venture, uh, 1 billion in funding coming in, uh, to make this.

It's for electrics and electronics and software kind of platform stuff.

It's, like kind of the backbone of some of these electric vehicles.

Uh, it's gonna be sort of that's the joint venture.

Is this the this technology gonna use across a number of of EVs?

And it could be as much as $5 billion given, uh, the the progress of their of their JJ V. So, for Rian, you see the stock up.

I mean, this is a huge move right there.

It's after hours, right then during trading.

But, um, basically, this is kind of kind of allay some concerns about do?

Do they have enough money to kind of keep going to reach 2026 when their balling vehicles come out?

That was my question is whether you thought prize is sort of like changed.

It helped to change the story, the narrative, because there was a lot of questions about this company, and we don't know.

We don't know.

It's the the $1 billion A convertible offerings.

We don't know how much that's gonna be in terms of stock, but But right now you gotta say to yourself, they have the ability to have the backing of VW, one of the biggest auto companies in the world, to kind of ex execute their vision, bring out those mass, uh, mass market vehicles in 2026 so that it's a big step in the right direction for Rbe.

And I think that's why we're seeing the enthusiasm right now in the in the stock.

Uh, big move for them.

And just for people who have not covered follow this closely.

They make this sort of premium electric, uh, pickup truck, which I personally think looks really cool when you see it out and about.

But the company came public in 2021.

It's $78 a share.

And as we just saw, they're trading E. Even with this big increase, they're trading around 15.

So they the the sort of lo I mean, listen, almost everything that went public in 2021 has come down a lot.

But still, the prospects for this company that were so lofty it has it's been a had a harder time.

Yeah.

You know, um, at at the depressed price levels, as I was below, I believe $10 at some point.

Um, you know, we're talking about They have cash on hand and IP technology where it was sort of like even money.

There it was.

You're paying, you're paying.

Obviously the the debts there, that's the big problem.

But, um, you're absolutely right, Julie.

I mean, the the enthusiasm was was insane at that point, and it kind of came back to Earth.

We kind of saw the fact that they were losing money on every vehicle.

Sold, uh, RJ, scaring said yesterday in a Reuters report Yesterday, they went to the visit the factory and talked about how they had improved a lot of their cost cutting.

They simplified processes.

Cut them like 50 components from some of the vehicles.

They're making the vehicles cheaper.

That was a big positive they we saw yesterday.