CNBC "Mad Money" host Jim Cramer on Wednesday advised investors of electric vehicle stocks, especially Rivian Automotive Inc RIVN and Lucid Group LCID, to stay disciplined.
What Happened: Cramer on his show reminded investors the lessons from the dotcom bubble in 1999 when there were many opportunities to make money if one pulled out early.
“There were many stocks that made you money back then, but with the exception of Amazon.com Inc AMZN, you got killed if you didn’t quickly ring the register,” Cramer said.
Cramer pointed at the Rivian Automotive and Lucid stocks that have soared recently only to decline on Wednesday.
The former hedge fund manager advised investors who have already made loads of money from Rivian and Lucid to book profit on the half and remain invested with the rest.
“Remember, you’re playing momentum, not car companies and not technology, and in that case it’s better to ring the register early and often.”
Cramer warned investors looking for the next Tesla Inc TSLA stock to “recognize that it might not happen” at all, adding that multiple electric vehicle companies may succeed in future but that does not imply their stocks will march higher as well.
Why It Matters: Rivian stock has risen 45% since last week and secured $124.5 billion valuation — much more than that of legacy players Ford Motor Co F and General Motors Co GM.
Lucid’s market cap blew past legacy automaker Ford’s market share on Wednesday.
Rivian has delivered some electric trucks to its own employees and is yet to begin making deliveries to customers. Lucid delivered some vehicles last month.
Price Action: RIVN shares fel 15.08% to $146.07 a share on Wednesday. Lucid closed 5.35% at $52.55 a share. Lucid stock has risen 423% so far this year.
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