Rivian IPO Values EV Startup at Massive $77 Billion Figure

It's a huge figure for a startup still in the early days of ramping up production.

As far as electric vehicle startups go, Rivian seems to be having a better time than many. Its vehicles have even been spotted driving around in the real world, which is more than many of its rivals can boast. It's still early days for the startup, but it's preparing for an initial public offering (IPO) on the stock market this week. The company will offer its shares at $78 a piece, as reported by the Wall Street Journal.

That price gives Rivian a valuation of over $77 billion, roughly in alignment with reports from early October. This puts it in the range of companies like Ford and GM, who have market caps of approximately $80 billion and $85 billion respectively. It's also a jump from what was initially expected, with early targets originally being for a price of $57-62 a share.

Regardless, it's a huge figure, particularly for a company that posted a $2.7 billion deficit as recently as June 30, 2021. Big losses are kind of a thing for electric vehicle startups, though. Tesla famously ran losses in the hundreds of millions for years, and now stands as one of the world's few trillion-dollar companies. It's a shocking climb for a company that was worth just $86 billion in January 2020; it's now worth more than the next six automakers combined. 

The company thus far has collected minimal to no revenue, as it has only just started deliveries to customers recently. Wall Street Journal reporter Eliot Brown noted that the last zero-revenue company to come close to such a high valuation for its IPO was Corvis Corp. The company hit the stock market in 2000 valued at $11 billion, before going bankrupt two years later in the midst of the dotcom crash.

However, the valuation is propped up by a large number of high-value investors. Amazon, along with investment firms T. Rowe Price Group Inc, Coatue Management and Franklin Templeton have all indicated their intentions to invest at the IPO price, according to the Wall Street Journal.

As for its actual output, Rivian has three models on its roster at the present moment. The R1T pickup truck has generated plenty of hype, and The Drive got behind the wheel of a pre-production example in September. Furthermore, there's the R1S SUV, spied recently seen picking up Jeff Bezos after his Blue Origin mission. Finally, there's the Amazon delivery van which is the company's primary focus as it hopes to deliver 100,000 units by 2025.

Given the hot market, the valuation for Rivian may not be a huge shock to pundits in the stock trade. The company does appear to be capable of building some cars, and enthusiasm for new automakers in the electric vehicle segment has been meteorically high. At the same time, comparing the valuation to other car companies, which build millions of cars every year, the number seems patently ludicrous. However, the stock market cares not for such matters. Whether the valuation holds up will be revealed when the stock goes live on NASDAQ this Wednesday under the stock symbol RIVN.

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