Rivian soars on stock market debut
November 11, 2021 - Rivian Automotive surged on its Nasdaq debut with an opening market valuation of $86 billion, reflecting blockbuster expectations for the electric truck-maker, which has generated minimal revenue.
The Amazon-backed company’s stock started trading on the Nasdaq exchange on Wednesday (November 10), ranking the electric vehicle maker ahead of Ford Motor Co at $77.37 billion, and Lucid Group at $65.96 billion.
Rivian’s shares closed at $100.73, 29 per cent higher than its initial public offering price of $78 apiece. Before deductions, the company will raise about $11.9bn, the biggest IPO haul for a U.S. company since Facebook’s flotation in May 2012.
Rivian launched its R1T pick-up truck and R1S sport utility vehicle in September and has just over 50,000 pre-orders for the EVs, as well as an order from Amazon for 100,000 trucks to be delivered by 2025. Amazon has participated in several multibillion-dollar funding rounds for Rivian and owns 22 per cent of the company.
Rivian reserved some seven per cent of its IPO allocation for its directed share programme, which included people who pre-ordered its R1T and R1S. Pre-order customers could purchase a maximum of 175 shares at the $78 IPO price -- costing $13,650. After the stock surged 29 per cent, the stake is worth $17,628.
In the driving seat of California-based Rivian is CEO and founder R. J. Scaringe, 36, who had set his sights on building his brand of cars since high school.
After securing a master’s and a doctorate in mechanical engineering at MIT, Scaringe founded the first iteration of what would become Rivian in 2009, with less than 20 designers and engineers.
Rivian had a net loss of $1.08 billion in 2020 and $994 million in the first six months of 2021, compared with a $377 million deficit a year earlier, according to its filings. Rivian expects to record a net loss in the third quarter of $1.28 billion due to costs associated with the start of production of the R1T.
The company will only produce about 1,200 vehicles by year-end at its plant in Normal, Illinois, and estimates that annual production will hit 150,000 units at its main facility by late 2023.