Rivian shares closed at $100.73, marking a nearly 30 percent
jump from its offering price.
That made Rivian the second most valuable US automaker after
Tesla, which is worth $1.06 trillion. Despite just having started selling
vehicles and having little revenue to report, Rivian ranked ahead of General
Motors at $86.05 billion, Ford at $77.37 billion, and Lucid at $65.96 billion.
Rivian also has trouble ramping up production in Illinois as
supply-chain constraints have hit automakers globally. Last July, the EV maker
said COVID-19 and its impact on suppliers had delayed the launch of vehicles
out of Illinois.
Since last 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 debut
price.
The IPO allowed Rivian to raise about $12 billion (roughly
Rs. 89,372 crore) to fund growth, and that figure could rise to $13.7 billion
if the full over-allotment of shares is exercised. This makes it the biggest US
IPO since Alibaba Group went public in September 2014.
"The transition to a public company (and) the growth in
our capital base" enables Rivian to develop "promising products and
volume and growth in terms of new segments and new vehicles that we'll be going
into," Rivian Chief Executive R.J. Scaringe said in an interview.
Wall Street's biggest institutional investors, including T.
Rowe Price and BlackRock, are betting on Rivian to be the next big player in a
sector dominated by Tesla amid mounting pressure on automakers in China and
Europe to eliminate vehicle emissions.
Amazon is Rivian's largest shareholder with a 20 percent
stake.
Rivian's IPO comes against the backdrop of the United
Nations Climate Summit, where automakers, airlines and governments unveiled a
raft of pledges to cut greenhouse gas emissions from global transport.
GM CEO Mary Barra on Wednesday said Rivian's IPO only showed
how undervalued her company is.
"What it highlights to me is the huge
opportunity," she said at a New York Times event. "General Motors is
so undervalued."
Expansion plans
Rivian has been investing heavily to boost production,
doubling down on its upscale all-electric R1T pickup truck launched in
September. It plans to follow that with an SUV and delivery van, hitting some
of the hottest segments in the market.
The Irvine, California-based company plans to build at least
one million vehicles a year by the end of the decade, Scaringe said. It has a
plant in Illinois, and has announced plans to open a second U.S. factory and
eventually setting up production in China and Europe.
"Rivian is in the early stages of delivering its first
vehicles to customers, which tells investors the company and vehicles are
'real' and not merely pictures in a slide deck," D.A. Davidson & Co
analyst Michael Shlisky said. "This has been an issue with other EV
companies in recent months."
On Wednesday, 10 environmental and advocacy groups,
including Sierra Club and Greenpeace, urged Rivian to engage with labor unions
as the company grows. Workers at Rivian's plant in Illinois are not unionized.
Founded in 2009 as Mainstream Motors by Scaringe, the
company was renamed in 2011 as Rivian, a name derived from "Indian
River" in Florida, a place Scaringe frequented in a rowboat as a youth.
Scaringe will hold all outstanding Class B common shares
after the IPO and get 10 votes per share, Rivian said in a filing.
Rivian, also backed by Ford, priced an upsized IPO of 153
million shares at $78 per share, raising nearly $12 billion, making it one of
the biggest US IPOs of all time. Ford declined to reveal plans for its Rivian
stake of about 12 percent, which was worth about $10 billion on Wednesday.
Amazon, T. Rowe Price, Franklin Templeton, Capital Research
and Blackstone are among a group of "cornerstone investors" which are
indicated to buy up to $5 billion worth of shares, according to the filing.
Rivian's shares were also offered to retail investors on
Social Finance (SoFi).
Morgan Stanley, Goldman Sachs, and JP Morgan were the lead
underwriters for the offering. © Reuters
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