Rivian Automotive, Inc. (NASDAQ: RIVN) is up 7% after its first initial public offering (IPO), with the company temporarily reaching $100 billion in value on November 10.
Premarket trading on Thursday, November 11, saw Rivian stock surge nearly 9% higher, putting the electric vehicle (EV) maker’s valuation above that of automotive behemoth General Motors (NYSE: GM) and Ford (NYSE: F) as investors continued to show a strong interest in the world’s newest publicly traded EV manufacturer.
At the start of premarket trading, Rivian’s stock was up as high as 8.71% to $110; at the time of publication, its consolidated last sale was $107.11, up 6.33%, as per Nasdaq premarket. After closing the stock trading session at $100.23 on Wednesday, the stock gained about 30% from its initial public offering price of $78 a share.
In its first public offering, the electric truck and SUV manufacturer, backed by e-commerce powerhouse Amazon (NASDAQ: AMZN) and automotive giant Ford, set a price range of $72 to $74 per share.
Rivian’s IPO
Remarkably, the firm instantly surpassed rival automakers, GM, which has a market capitalization of $85 billion, and Ford, which is another one of its primary investors with a market cap of $79 billion.
It’s worth mentioning that the most recent IPOs to achieve such valuation levels were Meta (FB: NASDAQ) which reached a peak market capitalization of $104 billion, and Alibaba Group (NYSE: BABA) in 2014, which was valued at over $167 billion.
Rivian raised around $12 billion in the first public offering to support expansion, a sum that might climb to $13.7 billion if the whole over-allotment of shares is completed. The IPO has elevated the RIVN to the second most valuable carmaker in the United States, behind only Tesla (NASDAQ: TSLA), valued at $1.06 trillion.
In July, Tesla’s stock initially surged in response to news that construction delays and supply-chain problems caused by the pandemic, Rivian had to postpone deliveries of its much-hyped R1T electric pickup vehicle.
Elon Musk’s firm didn’t have to compete with a new electric pickup truck for a few months since Rivian was focused on keeping Amazon pleased. Meaning TSLA could compete in the electric truck (rather than electric-car) market by selling to individual consumers, thanks to Rivian’s manufacturing delays.
Company’s Prospectus
In particular, Amazon placed an order with Rivian for 100,000 automobiles to be delivered by 2030; the firms want 10,000 new Rivian-Amazon delivery trucks on the road by the end of next year.
Before the company’s first public offering, Amazon, which had invested more than $1.3 billion in Rivian, held 22.4% of the company’s Class A shares. At the current offer price, the shareholding is worth around $12.5 billion. Likewise, Ford has a 14.4% holding in Class A shares, currently worth $8 billion.
According to Rivian’s prospectus, the company expects to lose up to $1.28 billion in the third quarter, with revenue ranging from $0 to $1 million in that period. Making it is the latest electric vehicle firm to garner investor funding at a high valuation without having shown that it has a viable business plan.
Despite the fact that just a handful of Rivian trucks are now on the road, the firm claims to have a backlog of 55,400 pre-orders for its R1T and R1S electric cars. Compared to the R1T, which begins at $67,500, the R1S SUV starts at $70,000, with orders projected to be fulfilled by the end of 2023.
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