# Why 2021's Hottest IPO Proves that Value Investing is Dead

Canonical: https://stocksurgedaily.com/why-2021s-hottest-ipo-proves-that-value-investing-is-dead/

Electric automaker **Rivian** (RIVN) went public last week in [**one of the most anticipated initial public offerings**](https://stocksurgedaily.com/how-to-trade-a-high-flying-stock/) (IPOs) of 2021.

The company issued the shares at $78 apiece.

On the first day of trading, the stock opened up 36%.

And as of Tuesday morning, the stock had already doubled.

That gave the EV-maker a market capitalization of $143 billion...

And it made Rivian the third-largest automaker in the world.

But here’s the crazy part…

Rivian has _zero_ sales so far.

That’s right. The third-largest automotive company on the planet has yet to sell a single car, truck or SUV.

Rivian has prototypes. It has orders for future sales.

But this $143 billion dollar behemoth doesn’t have a single vehicle on the road.

![Five-Minute Chart of Rivian Automotive, Inc. (RIVN) Since IPO](https://lh3.googleusercontent.com/gvg2bBOpxG1gyPnGNwRN-juq52rH1mUcJ1cCqT2mXuQq2T9OdRldAOqIXZlb6B4BOh6Bl0pw0XRsUM5WOdvOIUxOgrJYOHJRqXDUBRaJOUuoI1LB1gLH5-Kf7ftH3RMHBOZbS2gp)

**_Five-Minute Chart of Rivian Automotive, Inc. (RIVN) Since IPO -- Source: TradingView_**

**Ford Motor** (F), with a market cap of $78 billion, has been making cars for over 100 years.

So has **General Motors** (GM), which is valued at $90 billion.

That means that this newcomer is worth nearly as much as both of these established companies combined.

## **What Investors Really Care About**

If there was any doubt that traditional value investing was dead, here’s the proof.

[**Stocks are not priced based on past sales**](https://stocksurgedaily.com/why-this-100-year-old-stock-strategy-is-still-relevant/).

The market doesn’t care how long a company has been in business or what its book value is.

And [**it doesn’t care how steady dividends were**](https://stocksurgedaily.com/Beat-Buffett-With-This-Simple-Strategy/) for the last two decades.

Investors are looking at one thing and one thing only – future profits.

How much money can this company make two, five and 10 years from now?

## **Look Forward**

The market is a discounting mechanism. Today’s prices are a reflection of what investors expect _going forward_.

The past is the past. It is no longer relevant.

The only value in analyzing past metrics comes from their ability to more accurately predict _the future_.

This is why historic metrics like the [**price-earnings (PE) ratio have little value**](https://stocksurgedaily.com/how-to-use-the-pe-ratio-as-a-profit-signal/).

If a stock is trading at a low multiple of its past earnings, many investors think it’s a deal and the stock is “on sale.”

But this is flawed thinking.

A low PE tells you that investors are expecting even lower earnings in the future.

If anything, [**I prefer a higher PE over a lower one**](https://stocksurgedaily.com/why-its-time-to-sell-tesla-stock/).

Why?

Because higher multiples indicate anticipated growth.

And that’s where I want to be positioned – in the stocks growing sales and earnings at the highest rate.

[**That’s where the money is made**](https://stocksurgedaily.com/the-base-of-a-great-trade/).

Embrace the Surge,

![](https://lh3.googleusercontent.com/NB_cHajt0xvHCZ_gqv9Xde2-S0fNLhq0u5YOo0x28oZM7u2eaKmfb05g2-FN6W2KDU8FU2ZilOE3Y0XNKWiuHecvXcv3VKNg4x9sWX9cUiTml9dblJGN5t9nyvdKJ_sEdx5QE5x-)

Ross Givens

Editor, **_Stock Surge Daily_**