Shares closed at $100.73, a nearly 30% jump from its offering price.
This later made Rivian the second most valuable US automaker. Tesla Inc., which is worth $1.06 trillion. Rivian was ahead of General Motors Co. by $86.05 billion, despite having very little revenue to start selling and reporting vehicle sales. ford motor Company for $77.37 billion, and Lucid Group for $65.96 billion.
Rivian also has trouble ramping up production in Illinois as supply-chain constraints plague automakers globally. Last July, the EV maker said that Covid-19 and its impact on suppliers delayed the launch of vehicles from Illinois.
Over the past year, EV companies have emerged as some of the hottest investments. Including securities such as options and restricted stock units, Rivian’s fully diluted valuation exceeded $106 billion at its first price.
The IPO allowed Rivian to raise approximately $12 billion for growth, and this figure could rise to $13.7 billion if the full allocation of shares is exercised. This makes it the largest US IPO since Alibaba Group Holding Ltd went public in September 2014.
“The transition to a public company[and]the increase in our capital base” enables Rivian to generate “promising products and growth in terms of volume and new segments and new vehicles that we are moving into,” said Rivian’s chief executive. RJ Scaringe said in an interview.
Wall Street’s biggest institutional investors, including T. Roe Price and BlackRock are betting on Rivian to be the next big player in the Tesla-dominated sector, amid mounting pressure on automakers to eliminate vehicle emissions in China and Europe. Amazon.com Inc. Rivian is the largest shareholder with a 20% stake.
Rivian’s IPO comes against the backdrop of a United Nations climate summit, where automakers, airlines and governments unveiled several pledges to cut greenhouse gas emissions from global transportation.
GM CEO Mary Barra said Wednesday that Rivian’s IPO only showed how undervalued her company is. “It’s a huge opportunity for me,” she told a New York Times event. “General Motors is so underrated.”
expansion plan
Rivian is investing heavily to boost production, doubling down on its upscale all-electric R1T pickup truck it launched in September. It plans to hit some of the hottest segments in the market with an SUV and delivery vans.
Scaring said the Irvine, California-based company plans to make at least one million vehicles a year by the end of the decade. It has a plant in Illinois, and has announced plans to open a second US factory and eventually set up production in China and Europe.
“Rivian is in the early stages of bringing its first vehicles to customers, which tells investors that the company and the vehicles are ‘genuine,’ not just the pictures in the slide deck,” said Michael Schlisky, analyst at DA Davidson & Company. “This has been an issue with other EV companies in recent months.”
Founded as Mainstream Motors by Scaring in 2009, the company was renamed as Rivian in 2011, a name derived from “Indian River” in Florida, a place Scaring used as a youth to own a rowboat. I come frequently.
Ford-backed Rivian also priced an upsized IPO of 153 million shares at $78 per share, which raised nearly $12 billion, making it one of the largest US IPOs ever. Ford declined to reveal plans for its Rivian stake of about 12%, which was valued at about $10 billion on Wednesday.
According to the filing, Amazon, T. Roe Price, Franklin Templeton, Capital Research and Blackstone are among a group of “cornerstone investors” indicated to buy shares worth up to $5 billion.
Shares of Rivian were also offered to retail investors on Social Finance Inc (SoFi). Morgan Stanley, Goldman Sachs and JP Morgan were the principal underwriters of the offering.
Echo Wang of Reuters in New York, Paul Lienert in Detroit, Niket Nishant, Tiyashi Dutta and Sanjana Sitara Shivdas in Bengaluru and Hyunju Jin in San Francisco contributed to this story.