Monday, November 29

Rivian: Record Debut on Wall Street at Tesla’s Worst Moment

Rivian This Wednesday consummated its debut on Wall Street, one of the most anticipated IPOs of the year on the New York market due to the high valuation of the company.

The electric vehicle manufacturer launched 153 million shares on the world’s largest stock market at an initial price of $ 78 per share, above the range of between $ 73 and $ 74 it had initially set.

The premiere comes just a couple of months after the company founded by RJ Scaringe You will submit your application to the Securities and Exchange Commission (SEC) in late August.

At the height of Facebook or Alibaba

The company explained Tuesday that it expects to raise about $ 11.9 billion from the offering.

In this way, it would reach a market value of about 76,400 million, which would mean a capitalization above its rivals Lucid or the Chinese Nio. Also from other vehicle manufacturers such as BMW or the Stellantis group.

It will, however, remain far from Tesla, the main player in the electric car market, which recently surpassed a trillion market capitalization.

“In the last decade, only Facebook or Alibaba have managed to capture amounts greater than 8,000 million. This is a record figure, ”Bankinter analysts point out.

Rivian, is it overrated?

Entities of the stature of Morgan Stanley, Goldman Sachs o JP Morgan, Wall Street references, as well as others such as Barclays, Deutsche Bank o Walls Fargo.

Investment funds Blackstone o T Rowe Price they also participated in the financing round with a contribution of $ 5 billion.

But interest in Rivian is not just limited to institutional investors. Manufacturers such as Ford have already signed agreements and the e-commerce giant Amazon showed a 22.4 percent share in the summer.

Amazon also led an investment of 2,500 million dollars in the company, the second round of financing after the 2,650 million contributed by the group of Jeff Bezos at the beginning of the year.

Precisely, Amazon announced an agreement of 100,000 Rivian cars and vans until 2025, with the first 10,000 units ready by the end of 2021.

Despite this, some analysts consider the company’s valuation too high. “The investments of Amazon and Ford do nothing to justify the valuation of the opv”, assess the analysts of the specialized firm New Constructs.

“Those investments were made at much lower prices and simply to position these companies to participate. We believe that the capitalization should be 13,000 million ”, point out the experts.

Tesla and the shadows of Rivian

Doubts that take on special relevance when looking at Tesla, of which many analysts consider that its shares are trading above their real price.

Also, the latest movement of its founder, Elon Musk, It has cost him millionaire losses in recent days. The mogul launched a poll on Twitter to determine if he should divest 10 percent of the shares he controls, with a favorable result from the participants.

In the next two sessions, Tesla shares fell 17 percent on Wall Street, the biggest drop in two days since September 2020. Something that reflects the volatility that the shares of these types of companies can have.

And it is that despite the expectation generated by the IPO, Rivian’s accounts are not going through their best moment.

The manufacturer lost about $ 1 billion in the first half of the year. Production did not begin until just two months ago, and estimates offered by the company point to delivering some 1,000 units of its vehicles by the end of the year.

“Rivian has yet to manufacture a significant number of vehicles and competes with well-capitalized electric vehicles, as well as with groups such as General Motors or BMW, which have decades of experience and multi-million dollar plans to expand production,” they detail in New Constructs.

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