Jeff Bezos-backed electric automaker Rivian raised more than $ 11 billion in a stock market sale that briefly valued the company at over $ 100 billion in one of the largest stock floats in the world. world.
The sale of shares on Wednesday values Rivian higher than either Ford or General Motors, although before the sale the company revealed that it had lost more than $ 2 billion since the start of last year and had not delivered. than 53 vehicles at the end of last month. He plans to deliver 1,000 by the end of the year.
Backed by investors like Amazon, Ford and oil-rich Saudi investment firm Abdul Latif Jameel, the share divestment is further proof of investor appetite for the electric vehicle market. Rivian sets himself up as a rival to Elon Musk’s Tesla, which is worth more than $ 1 billion.
Rivian announced Tuesday night that his shares will start trading at $ 78 each, well above the $ 52 at the lower end of the range he initially targeted. When the shares started trading on the Nasdaq stock market, they were listed at $ 106, valuing the company at $ 90 billion, but rose early in the session, pushing Rivian’s value beyond 100 billion. before ending the day at $ 86 billion.
Over 20 investment banks are involved in managing the sale, led by Morgan Stanley, Goldman Sachs and JP Morgan.
The price increase reflects the huge demand for shares in electric carmakers on the day a series of automakers and countries pledged to move away from fossil fuels by 2040 or earlier during the Cop26 climate conference in Glasgow.
The surge in interest has propelled electric car pioneer Tesla into the ranks of global billion dollar state-owned companies.
Unlike Tesla, Rivian has yet to record significant revenue, let alone profit. It revealed losses over 2019 and 2020 of $ 1.4 billion plus a loan of $ 2.5 billion when the offer was filed in October.
However, Rivian has the advantage of relying on Amazon, founded by Bezos, the second richest person in the world after Tesla boss Elon Musk.
The company was started in 2009 by RJ Scaringe, a 38-year-old entrepreneur with a doctorate in mechanical engineering from the Massachusetts Institute of Technology. Scaringe owns a relatively small 1.7% stake in the company, but has options to buy more shares that could catapult him into the ranks of the super-rich if the company turns out to be a hit with investors.
The sale of shares opens the final round of the rivalry between Musk and Bezos. Amazon owns 20% of Rivian, and Bezos rode one of the company’s prototype electric SUVs to the launch pad of its spacecraft in July, advertising the automaker.
Amazon has pledged to purchase 100,000 electric delivery vehicles from the startup by 2025.
Rivian’s first product, the R1, will be available in pickup or SUV versions, competing with Tesla’s Model X and electric SUVs from older manufacturers such as Ford and Audi, as well as new entrants including the Americans. Fisker and Canoo and the Chinese NIO.
Rivian will manufacture the R1 and commercial vans at a plant in Normal, Illinois. However, Irvine in California is home to the engineering and design of the car, including crucial work on propulsion and battery technology.
The company could achieve revenues of between $ 20 billion and $ 25 billion by 2025 if it can produce 350,000 vehicles per year at the plant, according to Chris McNally, an automotive analyst at investment bank Evercore ISI.