Stock in electric vehicle (EV) maker Rivian (NASDAQ:RIVN) rose on rumors it may partner with Apple (NASDAQ:AAPL).
Apple recently canceled its plans to build an “Apple Car” but may still be interested in the space, according to trade magazine reports.
RIVN stock rose 9% overnight and is expected to open this morning at about $11 per share, its market capitalization rising to nearly $11 billion. Apple was up 1% overnight and is now worth about $2.8 trillion.
Apple of Its Eye
I recently suggested that Tesla (NASDAQ:TSLA) should fire CEO Elon Musk and buy Rivian. I know that’s not happening. In the article, I called TSLA a stock to sell.
But the Apple story reflects the impulse leading to my story, Rivian’s growing reputation in EV circles. It is now seen as a company that understands the business and can scale to meet its cost challenges.
Rivian’s R3 announcement turned the industry on its head. The R3 will be a mid-size car at a mid-sized car price when it’s built in 2026 or 2027. Meanwhile, Rivian faces the challenge of selling its $45,000 R2 in quantities sufficient to justify the cost of a new plant in Georgia.
An Apple connection would bring Rivian an improved user interface and entertainment system. It would also give Rivian a second deep-pocketed benefactor alongside Amazon (NASDAQ:AMZN). They got the company started five years ago with an order for 100,000 electric delivery vans.
A Rivian connection would offer Apple much less risk than building its own car. Success could lead it to purchase Rivian, at least in the minds of some Rivian shareholders.
RIVN Stock: What Happens Next?
It’s possible that nothing happens as a result of all this press coverage. But the story is still intriguing enough to put smiles on the faces of both companies’ shareholders.
As of this writing, Dana Blankenhorn had a LONG position in AMZN and AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
