- Rivian stock rose as much as 9% in premarket Thursday after soaring the previous day during its IPO.
- The Amazon-backed EV startup finished Wednesday at $100.73 a share, giving it a market value of $85.9 billion.
- Investors are hoping Rivian will be the next Tesla and can thrive as countries focus on climate change.
Amazon-backed electric-vehicle startup Rivian rose as much as 9% in premarket trading Thursday, the day after the company soared in a blockbuster IPO and reached a valuation of $86 billion.
Rivian’s stock was last up 7.31% in premarket trading at $108.20 per share. It finished the day at $100.73 on Wednesday, having started trading at $78. Its shares trade on the Nasdaq with the ticker symbol RIVN.
The EV company ended Wednesday with a market capitalization of $85.9 billion on a non-diluted basis. Only in January, it had been valued at $27.6 billion after a private funding round, according to Bloomberg.
Rivian is an EV startup founded in 2009 that focuses on trucks. It made a loss of $994 million in the first six months of the year as it invested heavily in increasing production, and is yet to see any meaningful revenue.
But investors have flocked to the company despite its big losses, as they bet that the future is bright for electric vehicles as governments focus on climate change.
Rivian’s IPO sold 153 million shares and raised $11.9 billion for the company. It was the biggest trading debut since Facebook went public in 2012, and one of the 10 biggest on US exchanges ever.
The stock surged as it hit the market on Wednesday, reaching an intraday high of $119.46 and valuing the company at more than $100 billion on a fully diluted basis.
Rivian’s sky-high valuation was no doubt influenced by the success of Tesla, which had $13.8 billion of revenue in the third quarter and is now worth more than $1 trillion.
The valuation also reflects the exciting outlook for the EV industry, said Ben Laidler, global markets strategist at trading platform eToro.
“Industry volumes are seen rising at least 12 times by decade-end,” he said. “Tesla has shown that record 30% profit margins are possible. Rivian has the advantage of a broader target market, big-name partners, and a ‘democratized’ offering.”
Rivian said before the IPO that it intended to sell 0.5% of shares directly to retail investors via SoFi’s online brokerage platform, giving them the same access to the stock that institutional investors on Wall Street have.
Among Rivian’s backers is Amazon, which owned 22.4% of the class A shares before the IPO. Ford owned 14.4%.
Online shopping giant Amazon has ordered 100,000 trucks for delivery by 2025. Rivian overall has 55,400 preorders for its R1T truck and R1S SUV, which it expects to fulfil by 2023.