Yesterday was a wonderful day to own stakes of electric start-up Rivian, with the stock speeding 3.7% higher after MotorTrend crown its R1T electric truck as Truck of the Year.
Today, still, Rivian’s giving back all of those gains and more and is down at 4.2% as of 12:20 p.m.
Precisely, Bloomberg reported that a California judge has decreed electric archrival Tesla to precipitate its claim against Rivian, declaring that the Rivian stole reports from the her. Within 30 days, Tesla must create a list of all the documents it alleges were looted by many employees who left Tesla for Rivian.
Again, Rivian must inform Tesla what “steps” it took “to analyze and respond” to Tesla’s theft allegations when they were originally made back in July 2020.
On the face of it, this judicial decree doesn’t entirely look good like such bad news for Rivian. So why is it making Rivian investors nervous today?
Basically, what the judge’s order does is hasten the trial process and move things nearer to a day when Tesla will either win or lose its lawsuit against Rivian.
On the one hand, victory over Tesla would erase a big dark cloud over Rivian’s destinyy. But on the other hand, a loss in court could paralyze Rivian at an important time in its growth, as it’s operating to bring its R1T electric truck and R1S electric SUV to market and at the same time build 100,000 electric delivery vans for Amazon.
The good news for investors, however, is that after increasing $11.9 billion in its IPO last month, Rivian presumably has someplace in excess of $20 billion in cash on hand today. Giving that , much of that money will of course be earmarked for increasing production to build the tens of thousands of electric vehicles it presently has on order anticipating fulfillment. But even so, that leaves billions more to finance the company’s legal war with Tesla.
When you are right down to it, Rivian’s hurry to market, and investors’ excited approval of Rivian stock, has put Rivian in a situation where Tesla cannot just sue its rival into extinction. , this is a fascinating reason to be positive about Rivian