Electric automaker Rivian valuation pops above GM, Ford in biggest IPO of 2021 – TechCrunch


Happiness around Rivian debuted as a publicly traded company on Wednesday and plunged into overdrive with an opening price of $ 106.75.

If it sticks, it will give Rivian an implicit valuation of $ 90 billion. The opening price was nearly 37% higher than the listed IPO price of $ 78. Its absolute stunning numbers make Rivian one of the largest IPOs in US history, placing its market capitalization above one of GM and its supporter Ford.

Its share price continued to rise after opening at around 1 pm Eastern Standard Time, reaching $ 119 per share and then declining to about $ 112.

The historic scale of the Rivian IPO is not lost by its founder and CEO, RJ Scaringe. But perhaps as expected, he is bullish on the future of EVs, and in a recent interview he said that 90 to 100 million vehicles sold each year will move to electricity in the next 10 to 20 years.

“Ultimately, the way investors look at space really appreciates what the future looks like,” Scaringe said. “It doesn’t take long, and 100% of our business goes to electricity.”

Rivian is very early on in terms of vehicles and launches, but Scaringe said investors are looking at and evaluating the company based on its future potential.

“If they value us solely on today’s profit and loss (profit / loss), I think they miss the point of the company. Of course, they say they can achieve it over time. I’m seeing what I think, “he said.

It has not yet been proven that Rivian can achieve it. Investors, clients and industry observers will learn it soon. But its future plans are certainly ambitious, with the first two consumer vehicles (R1T pickup truck and R1S SUV) and Amazon, which will produce 100,000 electric commercial delivery vans by 2024. Far beyond the partnership of. Patent documents and Scaringe’s own comments TechCrunch shows that Rivian plans to launch a variety of consumer and commercial products.

Investors may also be confident that Rivian will be a technology leader as it promotes vertical integration, which means it plans to develop its own battery cells in the long run. Hmm.

“It’s very important to control and vertically integrate what we consider to be the core technology stack: all the electronics in the vehicle, the complete software stack, the propulsion layer in the vehicle,” Scaringe said. .. “Of all these, the most important are actually software and electronics.”

Wild IPO Ride

It’s been a fuss since Rivian published its IPO application last month. (It was secretly submitted for an IPO in August). Its filing (a detailed snapshot of Rivian’s financial position, risks and opportunities) shows that companies taking on the capital-intensive tasks of designing, developing, manufacturing and selling electric vehicles are running out of cash.

The company planned to offer 135 million shares at a price of $ 57 to $ 62. The underwriter also had the option to purchase additional shares of up to 20.25 million shares.

Enthusiasm for investor demand is probably a conservative expression for 2021. In addition to raising its target price twice, Libyan eventually went public for $ 78 per share, offering an additional 153 million shares of common stock.NS Submission to regulatory agency Posted late Tuesday night. Rivian also gave the underwriters the option to buy 22.95 million shares, more than previously expected.

The size of an IPO also benefits some of its biggest supporters. Amazon holds a 20% stake and Ford holds a 12% stake in Rivian.

The surge in Rivian inventories is noteworthy for several reasons. For example, it is now more highly regarded than the reputed automakers that manufacture and sell millions of cars each year.

In contrast, Rivian has low incomes and high costs.

The company has employed thousands of employees at several facilities, including a factory in Normal, Illinois. Scaringe told TechCrunch in an interview Tuesday night.

Scaringe’s obsession with vertical integration also pushed up R & D costs (the company spent $ 766 million on R & D in 2020, and in the first half of 2021, the company spent $ 683 million on R & D. rice field).

As a result, net losses increased in preparation for the production of R1T pickup trucks and R1S SUVs. The company posted a net loss of $ 994 million in the first half of 2021 alone. This is well more than double the $ 377 million net loss recorded during the same period in 2020.

Meanwhile, the distribution of R1T to customers, which started last month, has begun to increase rapidly, and revenue is gradually increasing.

Electric automaker Rivian valuation pops above GM, Ford in biggest IPO of 2021 – TechCrunch Source link Electric automaker Rivian valuation pops above GM, Ford in biggest IPO of 2021 – TechCrunch

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