Barely days ago, the stock of Rivian Automotive (RIVN 5.20%) caught the market's attention when billionaire George Soros' investment fund revealed a stake in the electric vehicle (EV) start-up. Turns out, Soros isn't the only billionaire that eyed Rivian.
In its latest 13F filing with the Securities and Exchange Commission, activist investor and billionaire Dan Loeb's hedge fund, Third Point, revealed ownership of 4,046,572 shares of Rivian for the quarter ended Dec. 31, 2021. As of that date, Third Point's Rivian stake was valued at roughly $408.3 million.
Notably, Third Point didn't own any shares in Rivian until the third quarter, which means something about the EV pickup truck manufacturer must have caught Loeb's attention in the following months. Rivian stock surged Thursday morning on the news, encouraging some to bet on Rivian stock ahead of the company's quarterly earnings release on March 10. Should you jump in, too?
But while institutional buying in stocks is seen as a stamp of approval, you must also remember that such financial institutions do not disclose their stock moves in real time, and a lot may change by the time you find out what they bought and sold.
So for example, the latest filings from Loeb's and Soros' funds reveal their portfolios as of the end of 2021, and there's no knowing yet whether they still own, have bought more, or sold off Rivian shares since.
In fact, if Loeb and Soros saw an opportunity in the sharp dip in Rivian's stock price in the end of 2021, they must be disappointed given how far the EV stock has fallen further since -- it's down a whopping 37% year to date, as of this writing.
The point being, if you want your money's worth, you might want to pay less attention to billionaire moves on a stock and stay laser-focused on the company's underlying fundamentals and growth opportunities.
Rivian was an early mover in the red-hot EV industry, and its R1T pickup truck even won the 2022 MotorTrend Truck of the Year award. However, Rivian failed to meet its production target last year even as its net loss mounted to $2.2 billion against revenue of only $1 million during the nine months ended Sept. 30, 2021.
Yet the demand for the R1T pickup has been strong so far, and Rivian is reportedly ramping up production rapidly now to nearly 200 units per week, according to Bloomberg. Meanwhile, Rivian is working on its R1S SUV as well as its commercial vans, for which it has already secured an order for 100,000 units from e-commerce giant Amazon (AMZN 0.91%).
Rivian, though, must show the numbers to gain investors' faith, which is why its upcoming earnings report is so important. Has it really scaled up production and deliveries? Has it delivered its first electric delivery vehicle (EDV) to Amazon as planned? Is it on track to start key projects like the construction of its second factory in Georgia this year?
These are just some of the important questions investors in Rivian should seek answers to on March 10, as only answers in the affirmative can help the stock rebound and sustain momentum given that it's still commanding a steep market capitalization of $58 billion despite the recent plunge.