Rivian, a maker of electric trucks and vans, is publicly trading at a stock price that valued the company at nearly $ 70 billion territory.
In a security filing on Tuesday, Rivian said it was selling its shares in the offering for $ 78. This sum will raise nearly $ 12 billion. That fundraising figure would surpass Uber, which raised $ 8 billion when it went public in 2019.
Rivian shares will be traded on the Nasdaq stock exchange on Wednesday under the ticker RIVN. At nearly $ 70 billion, Rivian’s market c – would -proach that of Ford Motor, which is valued at $ 80 billion and sold more than four million vehicles worldwide in the past year.
The market environment for the offering was shaken this week when shares of Tesla, the leading electric car maker, slumped after its CEO Elon Musk announced that it would sell some of its shares.
Rivian has a huge -petite for cash. Prior to that IPO, the company raised over $ 10 billion from investors like Amazon and Ford and expects to spend billions of dollars growing the production of its three vehicles: an upscale pickup truck for drivers who enjoy off-road driving ; a sport utility vehicle; and a van developed with Amazon, which has a significant stake in Rivian, and has ordered 100,000 of the vans.
Rivian and many other automakers are betting that consumers will be ready to make a quick move to electric vehicles in the next decade. General Motors has announced that it will end production of gasoline-powered vehicles by 2035. Tesla, which will sell nearly a million electric vehicles globally this year, has a market c – of $ 1 trillion, outperforming the aggregates of GM and Ford, Toyota Motor, Volkswagen, BMW, and several other automakers.
Much now depends on whether Rivian can scale its production to meet customer orders. Tesla went through many rocky months when it struggled to produce its sedan in large numbers.
By the end of last month, Rivian had only shipped 156 of its pickups known as R1Ts; It plans to start shipping the SUV, the R1S, next month. A financial report said it was not expected to fulfill the 55,400 orders for the truck and SUV before the end of 2023, highlighting that it would take time for the production lines to produce significant numbers of vehicles.
Like other electric vehicle manufacturers that went public earlier this year, Rivian is reporting huge losses. It recorded a net loss of $ 994 million for the first six months of this year, almost as much as it did in all of 2020, when it lost $ 1.02 billion. Investors may be willing to put up with the losses for some time. The delivery truck contract with Amazon should theoretically ensure a steady source of income.
And Rivian can also benefit from the auto sector’s view that it is well run. Its chief executive officer, RJ Scaringe, holds a PhD in mechanical engineering from the Massachusetts Institute of Technology and has not yet proven to be easily distracting or a source of unnecessary controversy and criticism of Mr. Musk of Tesla.
Rivians pickup and SUV are aimed at wealthy buyers who like the outdoors. “Keep the world adventurous forever,” says Rivian’s IPO prospectus.
Still, Rivian will face stiff competition, including established automakers who have a lot of experience with mass production. Ford is slated to begin production of an electric version of its F-150 pickup truck, the best-selling vehicle in the United States, next year. GM is expected to soon start selling an electric GMC Hummer – in both truck and SUV versions – and working on an electric Chevrolet Silverado pickup truck.
At the IPO price, Rivian is valued even higher at around $ 75 billion if its bankers sell additional shares they have on hand to meet strong demand and some shares that are issued as compensation to employees add to the calculation be included.