Bezos-backed Rivian valued at $ 65 billion in IPO | IPOs

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Electric car maker Rivian, backed by Jeff Bezos, is aiming for a market value of $ 65 billion.

Rivian announced late Tuesday that its shares would trade at $ 78 each, well above the lower end of its original target of $ 52 per share. It sold 153 million shares, more than the 135 million originally targeted.

The increased asking price means Rivian will raise $ 11.9 billion, which is in the top 10 all-time IPOs in the United States, according to Dealogic.

More than 20 investment banks are involved in the execution of the sale, led by Morgan Stanley, Goldman Sachs and JP Morgan.

The rise in price reflects the huge demand for stocks of electric car makers on the day a number of automakers and countries pledged to move away from fossil fuels by 2040 or earlier at the Cop26 climate change conference in Glasgow.

Growing interest has catapulted Tesla, the electric car pioneer, into the ranks of the world’s trillion-dollar public companies. At a valuation of $ 65 billion, Rivian would be roughly on par with BMW, the German automaker that shipped 2.3 million cars in 2020.

In contrast to BMW or Tesla, Rivian still has to generate significant income, let alone profits. When the bid was submitted in October, the company recorded losses of $ 1.4 billion plus $ 2.5 billion for 2019 and 2020.

However, Rivian has the advantage of being backed by Amazon, which was founded by Jeff Bezos, the second richest person in the world after Tesla CEO Elon Musk.

Bezos drove to the launch pad of his spacecraft in one of Rivian’s prototype electric SUVs in July, practically promoting the automaker.

Amazon owns 22% of Rivian’s shares and is committed to buying 100,000 electric delivery vehicles from the start-up by 2025. Rivian can only sell vans to Amazon for four years.

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Rivian’s debut product, the R1, will be available in pickup or SUV variants and will compete with Tesla’s Model X and electric SUVs from older manufacturers such as Ford and Audi, as well as newer entrants such as Fisker and Canoo from the USA or NIO from China.

Rivian will manufacture the R1 and commercial vans at a facility in Normal, Illinois. However, Irvine, California is home to the construction and design of the automobile, including important work on propulsion and battery technology.

According to Chris McNally, an automotive analyst at investment bank Evercore ISI, the company could generate revenues between $ 20 billion and $ 25 billion by 2025 if it hits its target of 350,000 vehicles produced annually at the plant.

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