Electric cars – Rivian with the world’s largest IPO – economy

The world’s largest IPO this year has garnered great interest from Rivian investors. Shares of the electric car maker, backed by Amazon and Ford, hit $ 119.46 when they debuted Wednesday, 53% above the issue price of $ 78.

The company had allocated the papers in a range of $ 72 to $ 74 and increased the number of shares sold to 153 from 135 million. This brings the issue volume to twelve billion euros. At the current price, Rivian’s market value is over $ 100 billion. This propels the company, which so far has had virtually no sales, to the second most valued American automaker and leaves behind traditional companies such as Ford and General Motors (GM). Only Tesla is rated better.

“Convening such an astronomical valuation without significant sales, no experience in production and with huge expenses in front of the chest, might initially meet with reluctance among potential investors,” said analyst Konstantin Oldenburger of the broker in CMC Markets line. “What Rivian already has, however, are powerful donors like Ford and Amazon.” Another plus after the IPO is the high level of cash of $ 13 billion that can be used for investments.

Online retailer Amazon, which owns around 20% of Rivian, has already ordered 100,000 delivery vehicles. “Even with the contract and everything,” joked Neil Wilson, chief analyst at online broker Markets.com, over the confusion surrounding a wholesale order for Tesla vehicles by Hertz. Days after the car rental company made the control units public, Tesla boss Elon Musk announced that nothing had been signed yet.

The electric car market is seeing increased demand around the world as consumers become more environmentally conscious and choose environmentally friendly vehicles. Tesla produced a record number of cars in the last quarter and is building factories around the world. Rivian is currently doubling production of its all-electric R1T pickup, launched in September. As of October 31, regulatory records indicate that orders have been received for approximately 55,400 R1T and R1S SUVs in the United States and Canada. Rivian said he started shipping the R1T and recorded revenue for the three months ended September 30. However, due to the higher production costs, the net loss will increase during this period. Rivian was founded in 2009. Since early 2019, the company has raised capital totaling $ 10.5 billion in several rounds of financing.

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