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Sunday, February 5, 2023

Rivian IPO could value company at almost $55B

Rivian’s first product, the 2022 R1T full-size pickup, is now in production and initial impressions, including from us, are positive.

That should bode well for the company’s efforts to raise additional funds by launching an initial public offering, the prospectus for which was filed in October and amended on Monday. The IPO is expected to be completed by the end of November, after which Rivian will list on the Nasdaq Global Select Market index under the ticker symbol RIVN.

According to the amended prospectus, Rivian will offer 135 million shares priced between $57 and $62 per share, with an option for underwriters to purchase up to 20.25 million additional shares. At the high end of that range, and assuming underwriters purchase additional shares, Rivian would raise around $9.6 billion and have a market valuation of around $54.6 billion—or close to the market valuation of established automakers like Ford and Honda.

The numbers will depend on demand from investors ahead of the IPO’s launch. However, demand will likely be strong as Rivian indicated in the amended prospectus that key investor Amazon, which has a 20% stake in Rivian, combined with other equity investments, plans to buy more shares. Ford is also a key investor in Rivian with an estimated 5% stake.

Both companies also have deals with Rivian for vehicle-development programs. Amazon has commissioned Rivian to build 100,000 electric delivery vans. A handful of vans were delivered earlier this year, and Amazon hopes to have the full fleet operational by 2030.

Rivian builds first customer example of R1T – September 2021

Ford has said it will use Rivian’s skateboard platform for an unspecified future EV. Rivian was also set to build a Lincoln EV at its Illinois factory, but that project was canceled in April 2020 as the coronavirus pandemic took hold.

An earlier filing revealed that Rivian had been burning through serious cash as it ramped up for September’s start of production of the R1T, with losses for the first half of 2021 coming in at $994 million, which was almost the total amount the company lost in 2020 and about double what it lost in 2019.

Most of the costs were associated with R&D spending, and this churn is set to continue through the end of 2023. The company expects its losses to total about $8 billion by that date, as it looks to expand its production capacity, including battery production, and add new models. Rivian has said that after the U.S., it will focus on expanding to Western Europe before expanding to Asia.

Rivian said in its latest filing that it delivered 156 examples of the R1T as of the end of October and plans to get that figure up to 1,000 by the end of 2021.

A conventional IPO would be unusual for an EV startup, as most have opted for the quicker route of going public through so-called “reverse mergers” with special purpose acquisition company (SPAC) shell corporations.

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