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Rivian (RIVN) IPO priced at $78/share, valuing EV company at $66.5 billion

Tesla (TSLA) shares may be taking a dump today, but there is more EV news in the form of Rivian's IPO pricing. We have all the details here.

Captain Business

November 9, 2021 7:45 PM

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Capping off another busy day of financial news, Rivian has announced the pricing for their IPO. The electric vehicle company, which has large private shareholders like Ford and Amazon, has priced its IPO at $78/share. The purported initial share price offering indicates a market capitalization of $66.5 billion. That's a lot of hamburgers.

Rivian has filed their Form S-1 prospectus with the SEC. Shares will trade on the NASDAQ stock market exchange under the stock symbol RIVN. Rivian's $66.5 billion valuation is very close to that of stodgier auto companies Ford ($79 billion) and General Motors ($85 billion). This is especially amusing as Rivian disclosed in their prospectus that they expect to lose $1.28 billion in Q3 2021 on revenue that is expected to come in somewhere between $1 million and zero dollars. Those interested in the stock should keep an eye on our guide for when the Rivian (RIVN) IPO starts trading.

Rivian really hasn't started shipping many vehicles, and it appears that investors are going to have to give management the benefit of the doubt that they will ultimately execute on their vision. There is currently a total of 55,400 pre-orders for the company's R1T and R1S EVs. R1S is an SUV that starts at $70,000, while R1T is a pickup truck with an entry price of $67,500. Those orders are expected to be delivered by the end of 2023.

Amazon, which invested over $1.3 billion in Rivian, owned 22.4% or RIVN shares at the time the prospectus was filed. Rivian already has a commitment from Amazon (AMZN) to purchase 100,000 by 2030. Additionally, Ford (F) owned 14.4% of Rivian before the IPO, and it remains to be seen what that company will do with its stake that is now approaching $8 billion. 

Rivian claims its factory in Illinois is capable of producing up to 150,000 vehicles per year, but that may be optimistic give the chip shortages affecting the broader automobile industry this year. Some EV stocks have lost their luster in the past week, with Elon Musk kneecapping Tesla shares with a Twitter poll. Perhaps the timing will be just right for people trying to invest in the next Tesla, but with a $66.5 billion valuation, Rivian is pricing in a lot of future growth.

This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.

Captain Business

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