Electric vehicle startup Rivian Automotive Inc’s RIVN blockbuster trading debut on Wednesday is estimated to have fetched early investors Amazon.com Inc AMZN and Ford Motor Co F massive sums.
What Happened: Both Ford and Amazon invested in Rivian in 2019 and owned about 13% and 20% in the electric vehicle maker leading up to the initial public offering.
Ford bought Rivian shares at an estimated $820 million in Rivian in equity and through convertible notes, according to the EV maker’s initial public offering. Amazon had invested $1.345 billion in Rivian.
These investments were worth $10 billion and $16 billion, respectively, based on Rivian stock’s closing price on Wednesday.
Sky-high Valuation: Rivian has delivered 156 R1T vehicles and made about 180 units as of October. The RJ Scaringe-led Rivian is looking to ramp up production and reportedly aims to launch more electric models and build at least 1 million electric cars before 2030. In spite of being at a nascent stage in terms of production, Rivian valuation surpassed $100 billion on first day of trading.
In comparison, legacy automaker Ford and General Motors Co GM — which are both spending billions of dollars to switch to a fuller electric vehicle portfolio — have lower valuations.
GM ended the day with a $86 billion market cap, higher than Ford’s $77 billion.
Rivian scored a compliment from Ford CEO Jim Farley on the blockbuster IPO.
Congratulations to @RJScaringe and the team at @Rivian on their IPO today. Yet another step forward. Our industry and planet will benefit from the shift to EVs.
— Jim Farley (@jimfarley98) November 10, 2021
Rivian has a manufacturing plant in Normal, Illinois with an annual capacity of 150,000 electric vehicles. The Tesla Inc TSLA rival has revealed plans for a second U.S. plant in Texas where it could spend above $5 billion.
Electric vehicle market leader Tesla has raced ahead with its popular Model 3 and Model Y vehicles and continues to ramp up capacity with giga factories across the world. The Elon Musk-led company recently hit a $1 trillion market cap after delivering record third quarter deliveries.
See Also: Why Jim Cramer Would Prefer To Sit 'On The Sidelines' With Rivian And Buy Ford Instead
Price Action: Ford shares closed 3.78% lower at $19.36 a share and GM shares closed 1.11% higher at $59.27 a share on Wednesday. Amazon shares closed 2.63% lower at $3,482.05 a share and Tesla shares closed 4.34% higher at $1,067.95 a share.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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