5.9 C
New York
Friday, March 29, 2024

Rising Tesla Rival Rivian Raises $12 Billion With Biggest IPO Haul Since Facebook

Courtesy of ZeroHedge View original post here.

As the competition in the electric vehicle market heats up (just as Tesla CEO Elon Musk uses a Twitter game as an excuse to sell stocks at the highest possible valuation, potentially to cover some debts) Rivian, an EV player backed by both Amazon and Ford (a formidable partnership given the other players in the market) has priced its Wednesday IPO at $78/share, raising roughly $11.9 billion in the offering, the biggest IPO take since Facebook's debut in May 2012.

The company's stock is expected to see its first trade on the Nasdaq Wednesday morning, and at $78/share the company's valuation would be $66.5 billion; which would rise to $77 billion on a fully diluted basis. In addition, Rivian has given underwriters a 30-day "greenshoe" option to purchase up to an additional 22,950,000 shares of Class A common stock at the IPO price, minus underwriting discounts and commissions.

Morgan Stanley, Goldman Sachs & Co. LLC and J.P. Morgan are acting as lead book-running managers for the offering. Barclays, Deutsche Bank Securities, Allen & Company LLC, BofA Securities, Mizuho Securities and Wells Fargo Securities are acting as additional book-running managers for the offering.

The offering also has a long list of co-managers, including Wolfe | Nomura Strategic Alliance, Piper Sandler, RBC Capital Markets, Baird, Wedbush Securities, Academy Securities, Blaylock Van, LLC, Cabrera Capital Markets LLC, C.L. King & Associates, Loop Capital Markets, Ramirez & Co., Inc., Siebert Williams Shank and Tigress Financial Partners are acting as co-managers for the offering.

Rivian will trade under the ticker symbol RIVN, while the offering is expected to close on Nov. 15, 2021, subject to the satisfaction of customary closing conditions.

Per the FT, the offering price is a significant jump over the initial $52 to $62-a-share range it had declared at the start of this month, and above its revised offer of $72-$74 announced as recently as Monday.

The rising valuation reflects the frenzy for any credible Tesla rival in the EV space; Rivian has yet to record any revenue, but it has $1 billion in losses for the first half of this year, and those losses are expected to swell next year. Rivian has already booked over 50K pre-orders for its R1T pick-up truck and R1S sport utility vehicle, along with an order from Amazon for 100K trucks to be delivered by 2025.

One anonymous source told the FT that many are betting Rivian's shares have the potential to achieve Tesla level success.

"The dream they’re selling is pretty extraordinary," remarked a person who worked on Rivian’s IPO. "If you think about Rivian’s predecessor in Tesla, and what has been accomplished in that stock, and how it has disrupted that industry and sustained that disruption, the dream around Rivian is pretty real too. It’s captivating."

Rivian has a lot going for it, including over $10 billion in funding from Amazon and Ford, a state-of-the-art manufacturing plant in Illinois and nearly 150K preorders. Rivian shipped its first batch of electric trucks in September 2021. Still, Rivian says it expects to spend another $8 billion through the end of 2023 and has warned investors that it will likely to "continue to incur operating and net losses in the future while we grow."

An EV company with a long and winding path to profitability…does that sound familiar to anyone?

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments

Stay Connected

157,449FansLike
396,312FollowersFollow
2,280SubscribersSubscribe

Latest Articles

0
Would love your thoughts, please comment.x
()
x