Rivian sets IPO at $ 78, Stonks to the Moon

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While no one around this neck of the woods would call themselves an expert on the finer points of the stock market, we know how to add. Talking heads al Wall Street newspaper are reporting that Rivian has set an initial share price of $ 78 for its IPO, a heady sum to be sure. What pushes this story into another dimension is that they would have sold 153 million shares at this price.

For those who track, that means they’ve raised nearly $ 12 billion, making RIVN the largest listing so far in 2021.

Beyond this basic math, however, your author will suggest readers target their browsers to WSJ for further financial analysis. Suffice it to say that Bloomberg apparently values ​​Rivian at something close to $ 75 billion, three times higher than at the start of this calendar year. An influx of interest into your company, in addition to the actual production of a vehicle, tends to be a net positive. Rivian shares will be traded on Nasdaq.

Here’s the part where this writer’s head starts spinning. Despite these huge valuations, the company lost nearly a billion dollars in the first half of 2021 and is on track to lose at least as much in the third quarter due to the costs associated with starting production of the all-electric R1T pickup. Being a profitable business but worth billions (on paper) is certainly a unique phenomenon for planet Earth. And maybe Ferenginar, but only after the Grand Nagus has recited all the Acquisition Rules.

Of course, careful readers and market observers have already gone down this path. Tesla has been a loss-making company for years despite attracting investors like honey flies. It remains an interesting stock for many, even after suffering a slump this week following Elon’s brilliant idea to poll Twitter to seek consent on the divestiture of some of his shares. With companies like Rivian and Tesla, it seems the lines between the automaker and the tech company are very blurry, at least for investors.

Rivian has also been in the news lately for other reasons, including allegations of a toxic work culture in which key executives felt excluded from certain decision-making processes. The executive apparently filed a lawsuit in California and took the matter to the American Arbitration Association.

Going back to the Wall Street trading floor, those whose job it is to report on such issues today speculate that Rivian’s IPO will immediately jump to around $ 120 upon opening, raising its implied valuation to over a one hundred billion dollars. Going forward, GM and Ford, companies that have been making vehicles for over a century, have roughly the same rating. Combined.

The head is spinning, in fact.

[Image: Rivian]

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