Rivn Mountain

Rivian IPO could value company at $50B+

Nov. 3, 2021
Company expects to have delivered more than 1,000 vehicles by year’s end

The planned initial public offering of electric vehicle manufacturer Rivian Automotive Inc. could raise about $8 billion and assign a value of more than $50 billion to the company, which as of Halloween had produced 336 trucks.

In the latest version of their prospectus, Rivian CEO R.J. Scaringe and his executive team say they are looking to sell 135 million shares for somewhere between $57 and $62 each. A consortium of more than 25 investment banks—and led by Morgan Stanley, Goldman Sachs and JPMorgan—is overseeing the planned offering.

Rivian, which last month also issued $1.25 billion of five-year senior secured floating rate notes, expects to have posted a net loss of about $1.2 billion in the first nine months of this year on negligible sales. Amazon owns a 20% stake in Rivian and is the company’s largest investor. Ford Motor Co. also is a notable owner, holding 13% of the company’s voting power. If the IPO goes through as planned, the companies’ stakes will be diluted to about 17% and 11%, respectively.

Citing Dealogic, Reuters reported Nov. 1 that Rivian’s IPO would be just the fourth in a decade to raise more than $8 billion, joining Alibaba, the former Facebook that is now Meta Platforms and Uber. If the offering hits its mark, Rivian would be worth only slightly less than Honda. Ford, by comparison, has a market capitalization of about $72 billion.

Rivian’s road to its IPO has been a bit bumpy of late. Scaringe in late July told people who had ordered his team’s R1T truck or the R1S sport utility vehicle wouldn’t be receiving their vehicles that month as promised. It was the second production delay for the company, which also plans to soon launch a commercial delivery van that has garnered a preliminary order of 100,000 units from Amazon.

In their prospectus, Rivian executives say they expect to begin delivering SUVs next month and should by year’s end have delivered about 1,000 trucks and 15 SUVs. As of Oct. 31, the company had roughly 55,400 R1T and R1S preorders in the United States and Canada, a backlog its leaders expect to fill by the end of 2023. The execs expect to ramp up the capacity of their Illinois manufacturing complex from 150,000 vehicles annually to 200,000 by 2023.

“We believe the combination of our deep focus on addressing climate change, building compelling products, and delivering a superior customer experience will enable Rivian to drive adoption and customer loyalty, powering our continued growth,” the prospectus reads.

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