Fledgling automaker Rivian, which recently began deliveries of its first production vehicle, the R1T pickup truck, has just made its much-anticipated debut on the U.S. stock market, pricing its initial public offering at $78 per share. A total of 153 million shares were offered.
Backed by giants like Amazon and Ford, Rivian was originally expected to price its shares somewhere between $57 and $62, but it increased that range last week to $72 to $74 a share. The new deal at $78 brought the company's market value to $11.9 billion, making it the largest IPO for a U.S. company since Facebook raised $16 billion in its 2012 debut.
Rivian's IPO is the largest across the planet this year and the 12th largest of all time, according to CNN Business. As reported by the Wall Street Journal, Rivian will have an initial valuation of more than $77 billion, making it almost as large as one of its major backers, Ford.
Prior to the IPO, Amazon, along with investment firms T. Rowe Price and Franklin Templeton, were named as part of a group of "cornerstone investors" expected to buy $5 billion worth of stock. Rivian's IPO is underwritten by Morgan Stanley, Goldman Sachs and J. P. Morgan, and the electric truck maker will be listed on NASDAQ under the symbol RIVN.
There’s some real madness in these numbers when you think about it. A financial expert we consulted, but who does not consider himself a specialist in this type of stock (and wishes to remain anonymous), explained that the stock opened at $106.75 and climbed to nearly $120 before coming down slightly at the end of the day. At the time of writing, the stock was a little over $100 (in USD, of course).
In our analyst’s view, there's something abnormal about the market right now, in that we’re seeing a company that's not yet making a profit being valued at tens, if not hundreds of billions of dollars.
Rivian's pre-IPO Form S-1 filing indicates that the company expects to deliver 1,000 vehicles by the end of 2021. There's a catch, however, as Car and Driver magazine reports. In a recent wrongful termination lawsuit, a former employee says the company is not on track to meet that goal. In the same complaint, Laura Schwab, vice president of sales and marketing, expressed concern that Rivian's advertised prices were not high enough and that the company was losing money on every vehicle sold. Her superiors reportedly said they would raise them after the company went public.
A story to follow.