The largest initial public offering in the world this year and one of the biggest in American history made a spectacular start yesterday as shares in a company touted as a future rival to Tesla surged by as much as 53 per cent.
The market value of Rivian Automotive, an electric vehicle start-up, briefly eclipsed $100 billion after its shares started trading on New York’s Nasdaq exchange. In contrast, Ford, one of the company’s investors and a titan of the American carmaking sector, is valued at $77.4 billion, while General Motors, another traditional industry heavyweight, is worth $86 billion.
The race to snap up Rivian shares eased and the shares closed up 29.1 per cent, or $22.73, at $100.73.
Rivian is expected to produce only 1,200 vehicles this year, but investors are betting that it will become one of the dominant players in a rapidly growing market dominated by Tesla, whose valuation recently reached $1 trillion.
The start-up raised $11.9 billion by selling 153 million shares at $78 apiece in an offering that was increased as a result of demand; a week ago, the company’s sights had been set on a valuation of $53 billion at $62 a share. It was the sixth-biggest initial public offering on the US stock market, according to Bloomberg.
Founded in 2009 by Robert “RJ” Scaringe, 38, and based on the west coast of the United States, Rivian makes electric vehicles at a manufacturing site in Normal, Illinois. Its range includes the R1T pick-up truck and the R1S sports utility vehicle. The company aims to lift production to an annual rate of 150,000 by the end of 2023 and is pushing for a million units by the end of the decade.
Rivian is backed by Amazon, which recently disclosed a 20 per cent stake and has ordered 100,000 electric vehicles, to be delivered by 2030.
Tesla’s recent surge on the stock market ended abruptly this week after Elon Musk, its billionaire chief executive, said that he would sell a tenth of his stake in the company following a social media poll. The shares remained in sharp focus yesterday, having declined by almost 16 per cent since Musk, 50, announced his intention to reduce his holding over the weekend, and the company’s valuation fleetingly slipped back below $1 trillion.