With markets touching all-time highs once again, it’s no surprise that the IPO market is continuing to stay strong as we approach the end of 2021. We’ve already seen a number of large, high-profile offerings hit the market this year, although not all have been successful. Perhaps the largest of which is coming up on the horizon. Rivian Automotive, the electric vehicle manufacturer backed by Amazon (NASDAQ: AMZN), plans to go public sometime next week with a $60 billion IPO.
At the moment, the company is currently going through a roadshow with management and potential investors. However, Rivian expects to sell shares at around $57 to $62 once it goes public. According to a regulatory filing submitted on Monday, the company would have a valuation of as much as $60 billion, assuming prices are around this level.
We’ve seen companies lower their IPO share prices in the past, so it’s possible that Rivian might do the same. However, given that it’s an EV company, one that’s backed by Amazon, no less, most investors are expecting the raw hype to push share prices even higher than that.
Since getting off the ground in 2019, Rivian Auto has received over $10.5 billion in funding from a number of backers. Besides Amazon, companies like Ford and Cox Enterprises also got involved in supporting Rivian. Despite this, Rivian has largely remained without any real revenues at all. Only in its most recent quarter did the company start delivering cars to customers.
Rivan’s primary business goal is to provide delivery vans for Amazon. The company plans to have over 10,000 vans ready by 2022, as well as 100,000 by the end of 2030. While most people haven’t heard of it, Rivian also managed to beat Tesla, GM, and Ford in being the first to announce an electric pickup. Rivian estimates over 1,000 of these pickups will be sold by the end of 2021.
Since the year began, U.S. capital markets have raised over $268 billion so far in IPOs. That’s already a record-breaking year for the IPO market. Rivian’s appraisal alone is around one-quarter of that figure, putting it roughly on par in size with companies like Honda and Ford. In contrast, the EV maker was valued at around $27.6 billion earlier this year.
Overall, the markets for electric vehicles remains as bullish as ever. From a macro perspective, high inflationary environments tend to hurt growth stocks, of which most EV stocks would fall under. However, it seems inflation worries are still kept largely under control right now, thanks in no small part to another record-breaking quarter of earnings. The Fed also continues to promise that inflation will only be a transitory phenomenon, and that it will stabilize going into 2022.
Amazon Company Profile
Amazon.com Inc is a leading online retailer and one of the highest-grossing e-commerce aggregators, with $386 billion in net sales and approximately $482 billion in estimated physical/digital online gross merchandise volume, or GMV, in 2020. Retail related revenue represented approximately 83% of total, followed by Amazon Web Services’ cloud computing, storage, database, and other offerings (12%), and advertising services and cobranded credit cards (6%). International segments constituted 27% of Amazon’s non-AWS sales in 2020, led by Germany, the United Kingdom, and Japan. – Warrior Trading News
