Rivian, an electric truck and van manufacturer, is going public with a stock price of roughly $70 billion, a staggering figure on Wall Street’s perception that the fast-growing electric vehicle sector is still a wide-open field.
The company said it would sell its shares in the sale for $78 in a securities filing on Tuesday. It will raise around $12 billion with that amount. That amount would be higher than Uber’s initial public offering (IPO) in 2019, which raised $8 billion.
Rivian shares will begin trading on the Nasdaq exchange on Wednesday under the symbol RIVEN.
Their market capitalization would be close to $70 billion, putting it on par with Ford Motor, valued at $80 billion and sold more than four million vehicles globally last year.
The offering’s market climate has to get shattered this week, as shares in Tesla, the largest electric-car manufacturer, have plummeted after its CEO, Elon Musk, announced he could sell part of his stake.
Rivian has a voracious thirst for money. It raised over $10 billion from investors including Amazon and Ford before this I.P.O., and it expects to spend billions as it tries to ramp up production of its three vehicles: an upscale pickup truck aimed at off-roading drivers; a sport utility vehicle; and a delivery van developed with Amazon, which owns a significant stake in Rivian and has ordered 100,000 vans.
Rivian and many other automakers believe that consumers will be ready to switch to electric vehicles within the next decade. General Motors has said that gasoline-powered vehicles will be phased out by 2035. Tesla has a market valuation of $1 trillion, surpassing GM, Ford, Toyota, Volkswagen, BMW, and several other automakers.
Much now hinges on Rivian’s ability to increase production to fulfill client demand. Tesla struggled to produce its vehicle in substantial quantities for several months.
Rivian had only delivered 156 of its trucks, known as the R1T, by the end of last month; the S.U.V. The R1S is set to begin deliveries next month.
It stated in a financial filing that it did not anticipate completing the 55,400 orders for the truck and SUV until the end of 2023, indicating that getting manufacturing lines churning out large numbers of cars would take time.
Rivian, like other electric vehicle companies public this year, is losing a lot of money. It lost $994 million in the first half of this year, almost as much as it lost in the entire year of 2020 when it lost $1.02 billion. For a while, investors may be ready to put up with losses. In theory, the Amazon van deal should ensure a continuous revenue stream.
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