Thursday, December 9, 2021
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Rivian nails their IPO with a $100 billion valuation

There’s been a bit of negative press around regarding Rivian’s spending habits over the last few months, including our personal favourite that included claims that the electric vehicle manufacturer lost billions of dollars over the 2020 financial period.

But anyone who understands finance knows that this claim actually isn’t even close to accurate. The truth is Rivian, at the time, hadn’t delivered a vehicle.

Better still, their financial statement which was filed when the company applied to be publicly listed a couple of months back, showed that compared to other EV makers who have applied for an IPO in the past 5-years, Rivian had an extremely strong asset base.

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Their cash flow statement showed that thanks to a strong pre-order response and venture capital program, the company was in a strong position. Those sentiments were vindicated today (Friday 12 November) when Rivian was officially listed on the Nasdaq exchange.

Despite being initially listed with a $106USD share price, Rivian’s value quickly rose to $114USD, and closed at $122USD. This means that on a fully diluted basis, Rivian’s debut valuation was $100 billion US dollars.

This makes them the second most valuable publicly listed automaker on the planet, only to Tesla (which currently holds a valuation of well over a trillion US dollars). If you’ve been paying attention, this actually isn’t all that much of a surprise.

Institutional investors in America, including some of the biggest hedge funds and banks, were desperate to get their hands on a proper electric automaker stock that, unlike Tesla, offered a unique value proposition and had strong venture capital backing.

The first opportunity for an investment of such calibre was back in April of this year when Lucid traded publicly by acquiring a special purpose acquisition company, in the form of an institutional fund named Churchill Capital IV Corp.

2022 Rivian R1S
2022 Rivian R1S

Since then, Lucid’s share price has traded more than 360 per cent higher ($45USD at the previous session’s close). This price rise has very recently compounded with Lucid opening multiple physical dealerships across the US and delivering its first vehicles.

While the company has gone about its public listing in an unconventional way, its history has been similar to Rivian. The company has a strong institutional background, with a large investment from the Saudi Arabian Government in 2019.

With even stronger financial backing from Amazon and Ford, Rivian was set to win out and generated far more buzz than the much more niche Lucid. Adding to the hype was the fact that the company specialises in trucks and SUVs.

Rivian is also headed by a man who many consider to be the next-generation Elon Musk. Robert “RJ” Scaringe (38) has a doctorate in mechanical engineering from MIT and has poured his entire life into Rivian.

He spent 13 years founding the company and developing its vehicles. For the first couple of those, he actually led the development of the company on his own, only expanding to a bigger team after receiving institutional investment from seasoned venture capitalists.

Unlike Musk, RJ has a reputation for being calm and charismatic. This shows in how the company has approached their vehicle launches over the past 12 months, including using Apple TV+ series The Long Way up to showcase the R1T prototype.

Having leapt over the speed hump which is Rivian’s initial public offering, the company is already commencing deliveries in the US, ahead of a global expansion that includes Australia. Most recently the R1T has been spotted testing in ice conditions in New Zealand.

Whatever your opinion on Rivian, or its founder, the company’s $100 billion US dollar launch (the highest initial public offering valuation since Facebook) proves that both the United States and the world is ready to hitch a wagon to this ride.

2022 Rivian R1T
2022 Rivian R1T

It also proves that the financial world is diving neck-deep into renewable energy solutions and are clamouring for the next big thing in the race to turn the world green. These are exciting times in both the economic and automotive world for sure.

This opinion piece was written by Marcus Tomczak, and first published on DriveTribe.com

News Desk
The News Desk is the hub of Exhaust Notes Australia. It's from here that our team of writers journalists and photographers bring you the latest happenings from the world of motoring.

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