Rivian briefly tops $100 billion market value, then eases in IPO debut

NEW YORK -- Shares of Rivian Automotive Inc. surged on Wednesday after the electric vehicle-maker raised about $11.9 billion in the biggest initial public offering of the year.

Shares in Rivian rose to as much as $119, but ultimately closed the day at $100.73, giving the startup company a market value of $98.6 billion.

Backed by deep-pocketed companies such as Amazon.com Inc. and Ford, Rivian sold 153 million shares Tuesday after marketing the price between $72 to $74, a range it had earlier elevated from $57 to $62.

The listing -- under ticker symbol RIVN -- is the biggest globally this year, and the sixth-largest ever on a U.S. exchange, according to data compiled by Bloomberg.

Rivian is hitting the public markets as it looks to make a dent in the electric vehicle market led by Tesla Inc., which has a market value of more than $1 trillion.

Founder and CEO R.J. Scaringe said in a Bloomberg TV interview Wednesday that Rivian’s biggest challenge is the “health of the supply chain” as it ramps up production amid parts shortages.

The company’s valuation reflects the company’s ability to scale quickly and its plan to build commercial vehicles, Scaringe said. That starts with 100,000 battery-electric delivery vans for Amazon, which Scaringe described as an “initial order.”

In addition to consumer EVs, Tesla has also built out a strong and growing energy-storage business including solar, home and commercial energy storage. Scaringe indicated that Rivian is looking at expanding in similar lines of business.

“For us, it’s a question of how do we, as rapidly as possible, transition ourselves away from a fossil-fuel based economy?” Scaringe said. “And that of course has a huge focus on the transportation products. But it also includes energy products. And this is something that we will certainly get into as we really try to accelerate that.”

Just a couple of months ago, Rivian delivered its first vehicles, mostly to its own employees. It will only produce about 1,200 units by year-end at its plant in Normal, Ill. The company, which lost nearly $1 billion in the first half of the year, estimates that annual production will hit 150,000 vehicles at its main facility by late 2023.

Big backers

Though it’s a newcomer to the public market, Rivian’s entry into the world of consumer EVs has been more than a decade in the making.

Scaringe set up the first iteration of what would become Rivian in 2009 in his home state of Florida.

Over the years, it attracted a wide array of backers. As much as $5 billion of the IPO shares are set to be bought by investors including Amazon, T. Rowe Price, Coatue Management, Franklin Templeton, Capital Research Global Investors, D1 Capital, Third Point Investors, Blackstone Inc., Dragoneer Investment Group and Soros Funds.

Rivian had a net loss of $994 million in the first six months of 2021, compared with a $377 million deficit a year earlier, according to its filings. Rivian expected to record a quarterly net loss of as much as $1.28 billion due to costs associated with the start of production of the R1T.

Rivian plans to allocate up to 7 percent of its shares to eligible U.S. customers who had pre-orders as of Sept. 30. To attract retail investors, up to 0.4 percent of the IPO shares will be allocated to SoFi Securities LLC’s online brokerage platform.

Scaringe is expected to maintain outsize influence over Rivian through a class of stock giving him 10 votes per share, compared with one vote each for the shares sold in the IPO.

The offering is being led by Morgan Stanley, Goldman Sachs Group Inc. and JPMorgan Chase & Co., with more than 20 banks listed on the cover page of its prospectus.