Rivian costs IPO at $78 a share, valuing firm at $66.5 billion

R.J. Scaringe, Rivian’s 35-year-old CEO, introduces his firm’s R1T all-electric pickup and all-electric R1S SUV at Los Angeles Auto Present in Los Angeles, California, November 27, 2018.

Mike Blake | Reuters

Rivian Automotive, the electrical automobile maker backed by Amazon and Ford, priced its IPO on Tuesday at $78 a share. The deal values Rivian at $66.5 billion.

Ought to underwriters train their full buy possibility, the corporate could have a market cap of over $68 billion. The inventory will commerce on the Nasdaq beneath ticker image RIVN.

Rivian mentioned it expects the IPO to herald $11.9 billion.

Final week, Rivian elevated the anticipated value vary to between $72 and $74 from a earlier vary of $57 to $62. At its $78 provide value, Rivian is already price virtually as a lot as Ford ($79 billion) and Basic Motors ($85 billion). That is all earlier than the corporate has even began producing actual income.

Rivian mentioned in its prospectus that it’ll lose as much as $1.28 billion within the third quarter, whereas income will vary from zero to $1 million. It is the newest EV firm to draw hefty investor capital at a stratospheric value with out but proving that it has a sustainable enterprise mannequin.

Lucid Motors is price $72.5 billion regardless that the corporate simply started manufacturing of its first vehicles. Nikola’s market cap was greater than Ford’s at one level final 12 months, regardless of the corporate having no income. It is now price lower than $6 billion, after a short-selling agency accused the corporate of creating “an Ocean of Lies.”

Traders are constantly making an attempt to hop on the following Tesla. Elon Musk’s firm topped $1 trillion in market worth final month and is now the fifth most-valuable U.S. firm.

Whereas Rivian continues to be successfully pre-revenue, the corporate mentioned in its prospectus that it has a backlog of 55,400 pre-orders for its R1T and R1S electrical automobiles. The R1T is a truck that begins at $67,500, and the R1S is an SUV beginning at $70,000, in line with Rivian’s web site.

The corporate mentioned it expects to fill these orders by the tip of 2023. Moreover, Amazon has ordered 100,000 automobiles to be delivered by Rivian by 2030, and the businesses plan to have 10,000 new Rivian-Amazon supply automobiles on the highway as early as subsequent 12 months. Amazon is pushing its fleet to renewable vitality sources, and mentioned in 2019 that it was buying 1000’s of automobiles from Rivian.

Amazon, which invested greater than $1.3 billion into Rivian, owned 22.4% of the corporate’s Class A shares previous to the IPO. That stake is price about $12.5 billion on the provide value. Ford owned 14.4% of Class A inventory earlier than the providing, a stake now valued at $8 billion.

Rivian says its manufacturing unit in Illinois has the capability to provide as much as 150,000 automobiles per 12 months. The corporate had over 6,000 workers as of the tip of June.

— CNBC’s Lora Kolodny and Annie Palmer contributed to this report

WATCH: Do you have to imagine the Rivian hype?

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