An euphoric debut is expected for Rivian Automotive, an Amazon-owned electric truck, van and SUV startup. The new entry is preparing to make its way onto Wall Street with a higher valuation than that of historic auto giants such as Ford and GM.
Investors eager to ‘discover’ the next Tesla have directed their attention to Rivian Automotive which will land on the Nasdaq with a valuation of 68 billion dollars.
At its offer price of $ 78, Rivian is already worth more than BMW and nearly as much as Ford ($ 79 billion) and General Motors ($ 85 billion).
The electric vehicle maker is expected to open at $ 125 per share, which implies a valuation of $ 106.6 billion and a 60% increase over the IPO price of $ 78 per share, according to CNBC.
Super evaluation
Rivian said he expects the IPO to bring in $ 11.9 billion. Last week, the company raised its predicted price range of $ 72 to $ 74 from an earlier range of $ 57 to $ 62.
Rivian in the prospectus indicates that it will lose up to $ 1.28 billion in the third quarter of 2021, while revenue will range from zero to $ 1 million.
Rivian is not the first automotive company to present itself in front of Wall Street without having yet shown that it has a sustainable business. Lucid Motors it is currently worth over 72 billion even though the company has just started manufacturing its first cars. Same goes for Nikola which last year had come to be worth more than Ford despite the company having no revenue. It is now worth less than $ 6 billion after a short-selling company accused the company of creating “an ocean of lies.”
Lots of pre-orders and broad shoulders thanks to Amazon and Ford
The company said in its prospectus that it has a backlog of 55,400 pre-orders for its electric vehicles, the R1T pickup and the R1S SUV. The R1T is a pickup truck that starts at $ 67,500 and the R1S is an SUV that starts at $ 70,000. Rivian with its Illinois factory claims a production capacity of up to 150,000 vehicles per year and had over 6,000 employees at the end of June.
The company expects to fulfill those orders by the end of 2023. Additionally, Amazon has ordered 100,000 vehicles to be delivered from Rivian by 2030, and the companies expect to have 10,000 new Rivian-Amazon delivery vehicles in circulation as early as next year. year. Amazon is pushing its fleet towards renewable energy sources and in 2019 said it bought thousands of vehicles from Rivian.
Amazon, which invested more than $ 1.3 billion in Rivian, owned 22.4% of the company’s Class A shares prior to the IPO. That stake is worth about $ 12.5 billion at the offering price. Ford instead owned 14.4% of the Class A shares prior to the offering, a stake now valued at $ 8 billion.