Rivian, the electric truck manufacturer, closes with a big gain after its IPO


Charging remains a challenge for all companies introducing electric vehicles. While stations are available in many urban centers, they are fewer in the suburbs and many less densely populated areas lack charging infrastructure. This could be a particular problem for Rivian as it expects owners to take its vehicles out into the wild where the nearest charging station could be many miles away.

The big question facing young EV companies is whether they have enough cash on hand to finance their expansion when sales are still low. Rivian used $ 3.5 billion in cash for operations and capital expenditures from early 2020 through the end of June this year. But Rivian appears to be able to finance its expansion in the near future. It had just over $ 5 billion of cash on hand at the end of September and the IPO will bring nearly $ 12 billion.

Rivian’s IPO was one of the largest in years, surpassing Uber’s 2019 offering, which raised $ 8 billion. But it’s smaller than Facebook’s 2012 offering, which raised $ 17 billion. So far this year, companies have raised $ 290 billion in 901 operations, compared to $ 169 billion raised in 457 operations throughout last year, according to data services firm Dealogic. The stock market is playing a crucial role in funneling money into new sectors of the economy, including companies that use green technology.

But for some analysts, investors are just throwing money on what’s hot and not doing enough to discern which companies are actually strong. “The market pricing mechanism is broken and you can’t see the real successes,” said Jones Trading’s O’Rourke.

But Mr. MacDuffie. The Wharton professor said he believes there is enough potential growth in the electric vehicle market for many companies to be successful. “It’s not so much a market where the winner takes it all,” he said. “We are probably more in a rising tide that lifts most, if not all, boats.”

Investors who took an early stake in Rivian, including Ford and Amazon, are sitting on big gains. Ford’s Rivian stock was worth $ 10 billion at Wednesday’s closing price and at least $ 16 billion on Amazon.

And Mr. Scaringe, Rivian’s chief executive, has a fortune too. Its shares in Rivian are worth over $ 1.7 billion. And this year, Rivian’s board of directors approved a new stock award for Mr. Scaringe that could be worth over $ 7 billion if the stock trades up to $ 295.


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