Rivian Shares Tank 15% After IPO Rally, RIVN Stock Down 6% Now
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Rivian Shares Tank 15% After IPO Rally, RIVN Stock Down 6% Now
Shares of EV maker Rivian Automotive Inc (NASDAQ: RIVN) plunged 15% after its initial public offering (IPO), which is considered to be one of the biggest public debuts in stock market history. The company went public in a highly anticipated public offering on the 10th of November, which was also its first trading day.
Rivian priced its stock at $78 for its IPO but rose about 120% on its debut, selling at $107 a share. While the price set for its valuation was around 70 billion, it surged to a whopping $90 billion in the last week.
The loss in the stock of Rivian also caused a decline in the net worth of the company’s founder, RJ Scaringe. Scaringe, who was worth about $3 billion, saw his fortune reduce to $2.6 billion as RIVN fell.
Despite this drop, the company still has a higher market value than other giants in the motor industry.
Rivian Boasts Outstanding Valuation Despite 15% Stock Decline
Ford Motor Company (NYSE: F) was valued at $79.08 billion and General Motors Company (NYSE: GM) at $90.9 billion as of Tuesday’s close. On the other hand, Rivian closed at $120 billion. At the time of writing, RIVN stands at a market cap of $149.35 billion. The company’s valuation still can not hold a candle to Tesla’s $1.06 trillion market cap.
This valuation is in testament to massive interest from investors for electric vehicles. This interest comes in good timing to President Joe Biden‘s order that half of the new auto sales should be EVs by 2030. Many automobile companies have also set on shifting their production line to electric cars.
In the light of this, Rivian faces some challenges in not being able to show a sustainable business plan yet though their stock may remain rival to Tesla Inc (NASDAQ: TSLA) as investors rethink. After being unopposed in the EV market for some time now, Tesla now has competition for the marginal investor.
After IPO; What Next?
IPOs are meant to draw a lot of investors’ attention, after all, resulting in the volatile rise of new stocks. Currently, Rivian is one of the top three trending market stocks behind Tesla and Toyota (NYSE: TM). However, market analysts are investors to carefully tread until RIVN can form an IPO base.
The company backed by Amazon.com Inc (NASDAQ: AMZN) and Ford is the first to release a fully electric pickup truck. Meanwhile, reports say that Ford is no longer on the Rivian board.
In all this, Rivian expects to lose about $1.28 billion this quarter even as they plan to launch electric SUV R1S in December. R1S is a three-row, seven-passenger utility bus. Both the R1T pickups and R1S utility buses will sell at $67,500 and $70,000, respectively.
Amazon, considered Rivian’s biggest customer, has a stake of 20% in the EV manufacturing company. Also, Amazon has placed an order for 100,000 electric delivery vans. The electric vehicle company is now the third most valuable carmaker on the planet.
At the time of writing, Rivian is trading down 6.70%, at $136.28 in the pre-market trading.
Rivian Shares Tank 15% After IPO Rally, RIVN Stock Down 6% Now