US
146

Rivian briefly hit $100 billion valuation as RIVN stock is up 6% premarket

Rivian briefly hit $100 billion valuation as RIVN stock is up 6% premarket
Jordan
Major
7 months ago
3 mins read

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. 

RIVN premarket. Source. Nasdaq.com

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.

What we like:

Highly credible broker

Perfect for beginners

Protected by insurance

80+ cryptocurrencies to invest

Latest News

Join us on Twitter or Telegram

Or follow us on Flipboard Flipboard

Like the article? Vote up or share on your social media

Recommended content

Weekly Finance Digest

By subscribing you agree with Finbold T&C’s

Jordan Major
Author

Jordan is an investor and market analyst. He's passionate about stocks, ETFs, blockchain, and digital assets. At Finbold.com, he delves into the technicalities to obtain future trends for new market traders and gives insights into user-friendly platforms for beginners.

AD