With its shares down by almost 90% since it went public in November 2022, Rivian (NASDAQ: RIVN) has been a hugely disappointing investment for those who bought shares early, especially compared to alternatives like Tesla, which is up by around 27% over that one-year timeframe. The upstart electric vehicle (EV) maker has had to raise capital as its cash burn has continued.

But now that those issues have been priced into the previously overvalued stock, could it be time to buy?

Rivian's story over the past year illustrates some of the dangers of investing in initial public offerings (IPOs) -- a dynamic where retail investors can often end up holding the bag for a start-up's powerful early-stage backers. In Rivian's case, these included giants like Amazon and Ford Motor Company, both of which had business partnerships with Rivian prior to its IPO. These deals were votes of confidence in the automaker, and likely contributed to its lofty initial valuation of $85.9 billion -- more than Ford and General Motors combined.

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Source Fool.com