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Rivian Misses Earnings Estimates Again As It Fights To Deliver More Electric Cars
Samson Amore
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
Rivian missed earnings expectations in its first quarter as production constraints and supply chain delays continued to slow down vehicle deliveries.
The electric automaker reported a first quarter net loss of $1.6 billion and posted first quarter revenue of $95 million, compared to expected revenue of roughly $130.5 million.
The numbers were an improvement over the $2.5 billion net loss the company reported last quarter and barely beat analysts' loss expectations—enough to boost its stock by roughly 8% in after-hours trading Wednesday.
In a shareholder letter Wednesday, Rivian said it expects to continue burning cash as it ramps up production.
“This dynamic will continue in the near term, but we expect it will improve” as production outpaces labor and overhead costs, the company said.
Rivian built 2,553 vehicles and delivered 1,227 in the first quarter, according to its report, bringing the total number of vehicles delivered to 2,148. The company needs to increase production by ten times if it’s to hit its revised forecast of 25,000 vehicles this year and 150,000 vehicles per year by 2023.
The direct-to-consumer auto startup said as of May 9 it received over 90,000 orders in the U.S. and Canada for its R1 vehicle. It also has another order to supply Amazon with 100,000 commercial electric delivery vans.
But the company has built fewer than 5,000 cars since it started production, a small figure for a company that plans to one day dominate at least 10% of the global auto market.
“Of course our focus as an organization for 2022 is to get more R1s and EVs on the road,” Rivian CEO R.J. Scaringe said during the company’s earnings call. “The majority of our time is focused on ensuring our teams are driving towards ramping [up] production and deliveries to customers.”
In a bid to compensate for slower-than-expected sales, Rivian earlier this year tried to raise the price of its vehicles by 20%, but buyers quickly objected and one shareholder sued. The company later backtracked.
To meet production goals, Rivian said it’s ramping up hiring at its plant in Normal, Ill. and planning to break ground on a new $5 billion, 2,000-acre factory outside of Atlanta, Ga., which came with a hefty $1.5 billion tax break from the local government. That factory is expected to create 7,500 local jobs. Rivian said it will produce 400,000 cars annually once it reaches full capacity.
Between its planned Georgia factory and its plant in Illinois, Rivian expects to produce 600,000 cars each year when it's fully up and running.
Those plans have failed to impress Rivian’s big-name shareholders, many of whom have sold off significant portions of their stock, including Ford, which sold 8 million Rivian shares this week – though it still maintains a stake. Ford originally had plans to develop an electric Lincoln SUV with Rivian, but the deal fell through last November.
Amazon backed Rivian in 2019 and said in its April earnings report it had taken a $7.6 billion loss on its investment.
In the last three months, Rivian’s stock tanked more than 60%, and since its IPO in November 2021 the stock is down over 75%.
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Samson Amore
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
https://twitter.com/samsonamore
samsonamore@dot.la
By Turning Tweets Into NFTs, Cent Capitalizes on Digital Currency Movement
07:00 AM | August 06, 2021
Whether Jack Dorsey intended it or not, when the Twitter founder sold his first tweet as a non-fungible token (NFT) for nearly $3 million in March, he helped to bring the blockchain-based financing technology mainstream.
He also gave a the company behind its sale some free, high-profile marketing. On Thursday, that startup announced it had capitalized on it to the tune of $3 million from a stable of celebrity investors.
Cent, the company behind the Valuables platform that mints tokens from tweets, will use the funding to further build out tools to help creators make money through NFTs.
Cent began as a social media platform in 2017 meant to help creators earn money via crypto payments. In late 2020 it launched Valuables, which allows users to identify a tweet they'd like to purchase as an NFT; if the tweet owner accepts, Cent mints the NFT and effects the transaction.
"Their insight was in surfacing the inherent value of the authentic, candid, human artifact," said Ron Martinez, a San Francisco-based intellectual property and digital technology entrepreneur.
Investors include Dreamworks and Quibi founder Jeffrey Katzenberg, Zynga founder Mark Pincus, LinkedIn founder Reid Hoffman, and musician-entrepreneur will.i.am. Galaxy Interactive and In/Visible also participated in the round.
Cent co-founder and chief executive Cameron Hejazi formerly worked in advertising, where he said he saw social media platforms racking up billions while the creators they relied on got peanuts.
Cent co-founder and chief executive Cameron Hejazi
"My mission is to try to help the people who are spending all this time creating value on the internet turn that into a sustainable source of income for themselves," he said.
Though Cent has offered few concrete details of its plans, Hejazi said he not only wants to help creators profit from their output, but also to be able to own their audience data.
He envisions creators calling on their audiences on platforms like Twitter, TikTok and Instagram to follow them on the Cent platform, where the creators will be able to own the audience data.
"We'd really like to see the proliferation of these open, interoperable systems," Hejazi said. "All the major companies have operated in closed ecosystems, which was appropriate at the time, but is no longer needed."
NFTs enable digital assets like .jpg files, songs and videos to be certified unique and therefore potentially valuable. They reached a fever pitch in March when Christie's, the auction house, helped digital artist Beeple sell one of his works as an NFT for $69 million.
NFT skeptics have gawked at such eye-popping sums, much of which has been fueled by cryptocurrency whales who've made a killing and are incentivized to see the technology grow. More and more ideas have filed in, ranging from using NFTs to unlock in-person experiences to turning human excrement into a collectible.
It remains to be seen if the cynics will be proven correct. Data from NFT analytics site CryptoSlam offers evidence of both a market cooldown and an acceleration.
The birth of the hashtag and the launch of Ethereum, minted as NFTs.
NBA Top Shot, which turns basketball highlights into collectibles, stood alongside Beeple as a symbol of the NFT exuberance. It sold over $224 million worth of NFTs in February and another $208 million in March. But by July, sales had plummeted to $22 million.
Others have picked up the slack and then some. AxieInfinity, a gaming platform that allows users to earn money by raising digital creatures that have been minted as NFTs, saw almost $667M of NFT sales in July, according to CryptoSlam. That far surpassed its previous high, set in June, of $122 million. And it's already sold over $135 million worth of NFTs in August.
CryptoPunks, which sells low-resolution character icons as NFTs, has had a similar trajectory. It reached a $98 million peak in March, but saw a new high in July with over $135 million in sales. In the first five days of August it has already sold nearly $90 million worth.
"We're witnessing the first generation of NFTs," Hejazi said. "I think the opportunity is around getting people a footing in what it means to create an NFT and what it means to own an NFT."
Cent earns a 5% commission on NFT sales and 2.5% on any secondary trades. Creators earn the remainder of the primary sale and 10% of the secondary. The company has about 50,000 users on Variables, from which it generates about $20,000 in monthly revenue, Hejazi said. It also earns revenue from its Cent social platform, but he would not disclose how much.
Professionals who work with creatives may welcome the new monetization opportunity.
"I am normally very cynical about this kind of thing and names of celebrity investors don't impress me, but this looks promising," said entertainment-tech lawyer Richard Thompson. "An NFT platform that is oriented toward creative people who have some sort of following is needed now."
dot.LA Explains: What Are NFTs?
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Sam Blake
Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake
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samblake@dot.la
What Does a TikTok Ban Mean for the Company’s LA Workforce?
05:00 AM | March 22, 2023
Evan Xie
From mass layoffs to the rocky economic climate, tech workers have had a rough few months. TikTok hasn’t been immune to these issues. In July, the company laid off about 100 employees across the globe, and then cut at least 20 advertising employees one month later. In January, TikTok cut a handful of people from its HR department over the team’s “limited practical value” to the company.
But TikTok also faces a problem different from any of its competitors—the US government is assessing whether or not its platform should be banned from the country. Leaving TikTok’s current 32,000 headcount in jeopardy of mass layoffs.
Though the company’s Chinese ownership is at the root of its political dispute, TikTok’s US headquarters are in Culver City. First opened in January 2020 with 400 employees, the location brought employees back to the office twice a week in July 2022. TikTok has not released information about how many employees work out of LA, but its Mountain View office houses roughly 1,000 employees. LinkedIn lists around 1,000 LA-based employees, but that number is slightly muddled by influencers listing TikTok as their employer. Offices in New York City, Austin and Nashville round out its US footprint.
Of course, TikTok could still be bought out by another company. But it's unclear what company would pay TikTok’s fee, which ranges from $40 billion to $100 billion. Experts have noted that major tech companies like Google and Meta already run their own social media platforms, so buying a competitor would open them up to antitrust scrutiny.
Others point to Microsoft and Oracle as potential buyers. But both companies have undergone recent layoffs this year, which brings into question how many TikTok employees would be kept aboard. Microsoft has also funneled $10 billion into OpenAI, which means the company might not be interested in diverting funds to a social media platform. Whoever the new owner is, the company could potentially scrap TikTok’s Culver City office, leaving a gaping hole in LA’s tech scene.
Still, any TikTok employee who survives a potential sale may benefit from a change in ownership. Even before the company was under political fire, TikTok faced scrutiny for cultural differences between its Chinese owner and its US offices. Last year, multiple employees across the country spoke out about being pressured to adhere to China’s “996 policy,” which has employees work 9 a.m. to 9 p.m., six days a week. Its content moderates have revealed taxing work environments that exposed them to graphic content. And even high-level executives have struggled as TikTok’s parent company, ByteDance, maintained decision-making authority.
If Congress does vote to ban TikTok, that could leave thousands of employees across the country in search of new jobs. And it couldn’t come at a more difficult time. Meta, Snapchat and Twitch, among other social media companies, have all had mass layoffs in the past few months. Which means there’s already a pool of unemployed tech workers in search of work, a number of whom have decidedly turned to other fields.
It’s unclear what the long-term timeline of the TikTok ban looks like and when the government’s ultimate decision will hit employees. But LA’s tech scene might need to brace itself for a mass wave of employees seeking a new home. And this time, they won’t have TikTok to document their employment woes.
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Kristin Snyder
Kristin Snyder is dot.LA's 2022/23 Editorial Fellow. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
https://twitter.com/ksnyder_db
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