Friday, December 3

Rivian, the threat to Wall Street’s automotive

In its first week as listed, Rivian has surpassed in market capitalization all the car manufacturers of Wall Street, except for the billionaire Tesla.

The company of RJ Scaringe hit the market with a price of $ 78 per share. Or what is the same, a capitalization of just over 66,000 million.

At its premiere, the best of the year on the New York Stock Exchange, it soared 37 percent, and since then it has practically doubled its valuation.

His successful debut brought Rivian’s capitalization to over $ 80 billion. Since then, the Californian manufacturer’s shares have appreciated more than 60 percent, and now accumulates a market valuation above 110,000 million.

It surpasses the traditional manufacturers … and the electric ones

A figure with which the Irvine (California) company surpasses traditional American manufacturers of the size of General Motors, with a market capitalization of 91,000 million, or Ford, with just over 20,000 million in shares.

Precisely, the latter saw in Rivian a different potential than the rest and chose to provide an injection of 500 million dollars two years ago.

“We are excited to partner with Rivian. I have come to know and respect RJ, and we share a common goal of creating a sustainable future for our industry, ”said then Bill Ford, CEO of the North American automotive giant.

But Rivian has not only outperformed its more veteran competitors; also to the young competition.

Manufacturers of fully electric vehicles such as Lucid Motors or china Nio -which is also listed on Wall Street- accumulate a market capitalization of 70,000 and 30,000 million dollars, far from Rivian’s figures despite having been on the trading floors for much less time.

Rivian’s weakness

However, there is still caution around the evolution of the company because Rivian still does not generate income after more than a decade of existence.

Since the beginning of last year, the manufacturer revealed in the listing brochure sent to the Securities and Exchange Commission (SEC) losses of 2 billion.

It also has the handicap of not yet marketing its vehicles and with a production chain that is significantly lower than that of most manufacturers.

“Deliveries of pickups from Ford or General Motors from next year provide a daunting advantage over offers from Tesla or Rivian,” they explain to Bloomberg Intelligence in a recent comment.

According to analysts, these two companies “will not have the capacity to produce these vehicles in volume” until at least 2023.

With only one factory in operation -in the United States- and another on the way -probably in Europe- Rivian plays the card of having the backing of investment funds such as T Rowe Price o Blackstone, which have placed their trust in the form of more than 4,000 million dollars in financing in the last year alone, according to what the company has revealed through press releases.

Another of its partners is one of the largest global conglomerates, Amazon, which has also invested billions in Rivian and has signed an agreement to acquire 100,000 of its electric pickups to incorporate them into its transportation fleet. The first 10,000 units should arrive, according to plans, by the end of this year.

Tesla, the rival to beat

All in all, there are only three car manufacturers that surpass Rivian in market value: the German Volkswagen, with more than 140,000 million in shares; the japanese Toyota, with about 300,000, and the American Tesla.

The company of Elon Musk surpassed a trillion dollars just a few weeks ago. A barrier that has now been lost after the ordeal of the South African businessman.

Since Musk published a poll on Twitter to measure the opinion of his legion of followers – more than 60 million – around the sale of part of his shares, which ended up executing last week, Tesla has lost about 160,000 million in the stock market.

In total, a 14 percent drop on Wall Street since last Monday, the 8th that leaves its capitalization at about 980,000 million.

The shares are now trading below the $ 1,000 per share they reached a few days ago, and the survey has again divided analysts.

On the one hand, you sign like Northeast Securities O Jefferies they revised their price target on Tesla higher in the past week, throwing out prospects pointing to $ 1,400 a share.

Other experts, such as brokers Tudor Pickering O Cowen lowered their price to around $ 630, while the firm North LB set a price target below $ 400. The consensus consulted shows a negative revaluation potential for Tesla of 20 percent, which would return its shares to $ 700.

Leave a Reply

Your email address will not be published. Required fields are marked *