Introduction
On Wednesday, November 10, the electric sport utility vehicle and pickup truck maker, Rivian, debuted on the Nasdaq. Before the IPO, the company’s shares traded at $78, giving it approximately $66.5 billion in market cap.
By the end of trading, they had risen by 29% to $100.74 in price and $85.9 billion in market cap. So far, only 150 of Rivian’s electric pick-up trucks have been sold, mostly to its own employees.
To compare, the well-established Honda and Ford, which sell several thousands of cars every year, have market capitalizations of just $53 billion and $80 billion respectively. Rivian is one of the latest intrigues of investors in electric automakers, and, maybe, it is high time you too got on.
Background
Rivian was founded in 2009. Headquartered in Irvine, California, it specializes in the manufacturing of self-driving cars, electric vehicles, and batteries. In September 2021, the company became the first electric maker to bring an electric pickup, the R1T, an all-electric, battery-powered, light-duty pickup truck, to the market, beating the already well-established industry leaders such as Tesla, Ford, and Honda.
Rivian has the good luck of being in the right industry at the right time. The climate is changing, boding potential disastrous consequences for the planet. On August 9, 2021, based on a report from the scientists at the Intergovernmental Panel on Climate Change (IPCC), the UN climate panel sounded a “code red alert” for humanity to start acting on climate change. Otherwise, weather extremes would only get worse.
Electric vehicles are one of the proposed solutions to that human-caused climate change. Even, despite Tesla being the current market leader, Rivian is also expected to benefit from the electric vehicle industry boom.
Financials
Rivian, in terms of financials, should be every investor’s delight. Having just been publicly listed, for over a decade, it had to depend mostly on institutional investors for funding. Since the seed-stage investment by the CEO, Robert Scaringe, in 2009, it has attracted Sumitomo Corporation, Standard Chartered Bank, and the Saudi-based Abdul Latif Jameel. Rivian is also backed by Amazon which, as of October 2021, had a 20% stake in the company. Cox Automotive and Ford also have investments in Rivian.
On November 12, 2021, Rivian became the most capitalized automobile company without any discernible revenue, with its share price having risen by at least 67% since IPO. To clinch the coveted spot, Rivian overtook Lucian Group Inc., a competitor whose stock has risen by over 300% this year alone. Rivian is now bigger than Daimler, General Motors, and Ford, and is set to overtake Volkswagen too.
Conclusion
The electric vehicle industry is booming. Across locations, whether Shanghai or London, Tokyo or California, the demand for battery cars has been steadily increasing. This unique advantage confers many benefits not only on well-established industry giants such as Tesla but also on new entrants. In the industry, Rivian is neither well-established nor new, meaning that it still has a lot of room for growth.
No wonder, riding on positive production and growth targets, Rivian had a blockbuster IPO. This might just be the perfect time for you to also get in.
You can find below the up to date chart of RIVN.
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