Shares of Rivian Automotive Inc rose 53% in a Nasdaq debut on Wednesday, giving the Amazon-backed electric vehicle maker a market valuation of more than $100 billion after the world’s biggest initial public offering this year.
Shares of Rivian closed at $100.73, jumping nearly 30% from its offering price.
This made Rivian the second most valuable US automaker after Tesla Inc, which is worth $1.06 trillion. Rivian was ahead of General Motors Company at $86.05 billion, Ford Motor Company at $77.37 billion and Lucid Group at $65.96 billion, despite vehicle sales to begin with and little revenue to report.
Rivian also has trouble ramping up production in Illinois as supply-chain constraints plague automakers globally. Last July, the EV maker said that COVID-19 and its impact on suppliers delayed the launch of vehicles from Illinois.
Amazon.com Inc. is the largest shareholder of Rivian with a 20% stake.
Over the past year, EV companies have emerged as some of the hottest investments. Including securities such as options and restricted stock units, Rivian’s fully diluted valuation exceeded $106 billion at its first price.
The IPO allowed Rivian to raise approximately $12 billion for growth, and this figure could rise to $13.7 billion if the full allocation of shares is exercised. This makes it the largest US IPO since Alibaba Group Holding Ltd went public in September 2014.
“The transition to a public company[and]the increase in our capital base” enables Rivian to generate “promising products and growth in terms of volume and new segments and new vehicles that we are moving into,” said Rivian’s chief executive. RJ Scaringe said in an interview.
Wall Street’s biggest institutional investors, including T. Rowe Price and BlackRock, are betting on Rivian to be the next big player in a sector dominated by Tesla Inc., Vehicles to Eliminate Vehicle Emissions in China and Europe. Amidst increasing pressure on manufacturers.
Amazon.com Inc. is the largest shareholder of Rivian with a 20% stake.
Rivian’s IPO comes against the backdrop of a United Nations climate summit, where automakers, airlines and governments unveiled several pledges to cut greenhouse gas emissions from global transportation.
GM CEO Mary Barra said Wednesday that Rivian’s IPO only showed how undervalued her company is.
“It’s a huge opportunity for me,” she told a New York Times event. “General Motors is so underrated.”
expansion plan
Rivian is investing heavily to boost production, doubling down on its upscale all-electric R1T pickup truck launched in September. It plans to hit some of the hottest segments in the market with an SUV and delivery vans.
Rivian is investing heavily to boost production, doubling down on its upscale all-electric R1T pickup truck launched in September.
The Irvine, California-based company plans to build at least one million vehicles a year by the end of the decade, Scaring said. It has a plant in Illinois, and has announced plans to open a second US factory and eventually set up production in China and Europe.
“Rivian is in the early stages of offering its first vehicle to customers, which tells investors that the company and the vehicle are ‘real,’ not just the pictures in the slide deck,” said Michael Schlisky, analyst at DA Davidson & Company. “This has been an issue with other EV companies in recent months.”
On Wednesday, 10 environmental and advocacy groups, including the Sierra Club and Greenpeace, urged Rivian to engage with labor unions as the company grows. Workers at Rivian’s plant in Illinois are not unionized.
Founded as Mainstream Motors by Scaring in 2009, the company was renamed as Rivian in 2011, a name derived from “Indian River” in Florida, a place Scaring saw as a youth in a rowboat. Comes frequently.
After the scarring IPO, Rivian will hold all outstanding Class B common shares and receive 10 votes per share, Rivian said in a filing.
Ford-backed Rivian also priced an IPO of 153 million shares at $78 per share, raising nearly $12 billion, making it the largest US IPO ever. Ford declined to reveal plans for about 12% of its Rivian stake, which was valued at about $10 billion on Wednesday.
According to the filing, Amazon, T. Roe Price, Franklin Templeton, Capital Research and Blackstone are among a group of “cornerstone investors” indicated to buy shares worth up to $5 billion.
Shares of Rivian were also offered to retail investors on Social Finance Inc (SoFi).
0 notes
Morgan Stanley, Goldman Sachs and JP Morgan were the principal underwriters of the offering.
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