Rivian, the electric car maker backed by Jeff Bezos, has raised more than $ 11 billion in a stock sale that valued the company at more than $ 100 billion in one of the world’s largest trading fleets.
Wednesday’s stock sale values Rivian higher than Ford or General Motors, despite the fact that prior to the sale the company revealed that it had lost more than $ 2 billion since the start of last year and had delivered just 53 vehicles per year. end of last month. It plans to deliver 1,000 by the end of the year.
Backed by investors including Amazon, Ford and Saudi investment firm Abdul Latif Jameel, who made his fortune in oil, the share sale is further proof of investors’ appetite for the EV market. Rivian is positioning itself as a rival to Elon Musk’s Tesla, which is worth more than $ 1 trillion.
Rivian announced late on Tuesday that its shares would start trading at $ 78 apiece, significantly above $ 52 a share at the lower end of the range it had originally targeted. When the shares began trading on the Nasdaq stock market, they were priced at $ 106, valuing the company at $ 90 billion, but rose in early trading, pushing Rivian’s value to more than $ 100 billion.
More than 20 investment banks are involved in the execution of the sale, led by Morgan Stanley, Goldman Sachs and JP Morgan.
The price increase reflects the huge demand for stock from electric car makers on the day that a number of car companies and countries pledged to do so. move away from fossil fuels by 2040 or earlier at the Cop26 climate conference in Glasgow.
The surge in interest has propelled Tesla, the electric car pioneer, into the ranks of the world’s trillion dollar public companies.
Unlike Tesla, Rivian has yet to post significant revenue, let alone profit. It disclosed losses during 2019 and 2020 of $ 1.4 billion plus loans of $ 2.5 billion when it applied for the offer in October.
However, Rivian has the advantage of being backed by Amazon, founded by Bezos, the world’s second-richest person after Tesla boss Elon Musk.
The company was founded 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% of the company but you have 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 last round of the rivalry between Musk and Bezos. Amazon owns 20% of Rivian and Bezos traveled in one of the company’s electric SUV prototypes at the launch pad of your spaceship in July, in effect, providing advertising to the automaker.
Amazon has pledged to buy 100,000 electric delivery vehicles from inception by 2025. Rivian can sell delivery vans to Amazon alone for four years.
Rivian’s debut product, the R1, will be available in pickup or SUV varieties, competing with Tesla’s Model X and Electric SUVs from older manufacturers like Ford and Audi, as well as new entrants, including Fisker and Canoo from the United States and NIO from China.
Rivian will build the R1 and commercial vans at a Normal, Illinois factory. However, Irvine in California is home to automotive engineering and design, including crucial work in powertrain and battery technology.
The company could generate revenue of between $ 20 billion and $ 25 billion by 2025 if it can produce 350,000 vehicles a year at that plant, according to Chris McNally, an automotive analyst at investment bank Evercore ISI.
George is Digismak’s reported cum editor with 13 years of experience in Journalism