Frankly, there is much about George Soros’ actions that I don’t like. For example, the man has supported prosecutors in cities across America whose presence seemed to lead to reduced prosecutions and increased crime. And his foundation has reportedly cooperated with the highly repressive, terrorist-supporting, anti-Western regime in Iran. But Soros became a multi-billionaire because he’s excellent at investing, so I think his decision to buy a huge chunk of Rivian (NASDAQ:RIVN) stock is noteworthy.
To be sure, Soros is far from the only big name who plowed huge sums of money into RIVN stock last quarter. Taken together, their investments bode very well for electric-vehicle (EV) start-ups in general and for Rivian in particular.
Big Names Bought RIVN Stock
As of the end of December, Soros’ family investment office, Soros Fund Management, owned about 20 million shares of RIVN stock, worth about $2.1 billion, Barron’s reported on Feb. 14.
Another buyer of Rivian’s shares was T. Rowe Price (NASDAQ:TROW), which acquired 162 million shares now worth $10.7 billion. Tudor Investment, which, according to an SEC filing, had over $44 billion of assets under management as of last year, bought more than $24 million of the EV start-up’s shares. And, as has been widely reported, Amazon (NASDAQ:AMZN) had 58.3 million shares of the stock that are now worth about $10.5 billion.
And in a recent article on RIVN stock, InvestorPlace Assistant News Writer Eddie Pan reported that, “According to Whale Wisdom, RIVN stock is now Soros’ largest public equity holding. The EV maker accounts for a whopping 28% of Soros’ equity portfolio.”
Rarely have I seen such a huge vote of confidence in a single stock by a multi-billionaire. And making the news even more astounding is the fact that Soros is not directly affiliated with Rivian, i.e., he’s not the CEO or a board member, and this is a start-up that just began producing vehicles in September 2021.
Super Bowl Ads Stoked EV Interest
In the week that followed the Super Bowl and disclosure of Soros’ RIVN stock purchase the next day, most EV start-up stocks have recovered significantly from the spiraling downturns in which they had previously been mired.
The Super Bowl was an important milestone, of course, because of the high number of riveting ads for EVs that were broadcast during the game.
Specifically, InsideEVs noted that “According to Cars.com, this year’s Super Bowl featured twice as many automotive commercials as last year. In fact, there were a total of seven brands highlighted with eight commercials, and most of them showcased an electric car.”
Showing that the ads for EVs were indeed compelling, Cars.com reported that, while the Super Bowl was being played, the hits on its articles about the automobiles advertised during the game jumped an incredible 23.6 times. And, as InsideEVs pointed out, most of the Super Bowl ads were for EVs.
From the market’s close on Feb. 11 to early afternoon trading on Feb. 16, Arrival (NASDAQ:ARVL) climbed 17%, Rivian and Lucid (NASDAQ:LCID) both advanced nearly 10%, and Fisker (NYSE:FSR) gain slightly over 10%.
The Bottom Line
Although, to put it mildly, I don’t at all admire Soros’ overall conduct, he is a great investor. And the huge purchase by his fund of RIVN stock constitutes a huge vote of confidence in EV start-ups in general and Rivian in particular.
Consequently, my confidence in Rivian’s shares has increased in the wake of the news of Soros’ move, and I’m more convinced than ever that the start-up has a great future ahead of it and that the stock is significantly undervalued at its current levels.
On the date of publication, Larry Ramer was long ARVL stock.
Larry Ramer has conducted research and written articles on U.S. stocks for 13 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.