Rivian, the electric truck maker, closes with a big gain after its IPO

Charging remains a challenge for all companies introducing electric vehicles. While stations are available in many urban centers, their ...


Charging remains a challenge for all companies introducing electric vehicles. While stations are available in many urban centers, their number is lower in the suburbs and many less densely populated areas lack charging infrastructure. This could be a particular problem for Rivian, as he expects owners to take their vehicles out into the wild, where the nearest charging station could be several miles away.

The big question for young electric vehicle companies is whether they have enough cash to fund their expansion while sales are still weak. Rivian used $ 3.5 billion in cash for operations and capital spending from early 2020 through the end of June this year. But Rivian appears to be in a position to fund its expansion in the near future. It had just over $ 5 billion in cash at the end of September and the IPO will bring in nearly $ 12 billion.

Rivian’s IPO was one of the biggest in recent years, overtaking Uber’s bid in 2019, which raised $ 8 billion. But it’s smaller than Facebook’s 2012 offering, which raised $ 17 billion. So far this year, companies have raised $ 290 billion in 901 deals, up from $ 169 billion raised in 457 deals last year, according to data services firm Dealogic. The stock market plays a crucial role in channeling money to new sectors of the economy, including companies deploying green technologies.

But for some analysts, investors are just throwing money at what’s hot and not doing enough to discern which companies are actually strong. “The market pricing mechanism is broken and you can’t see the real successes,” Mr. O’Rourke of JonesTrading said.

But Mr. MacDuffie. Professor de Wharton, said he believes there is enough potential growth in the electric vehicle market for many companies to be successful. “It’s not so much a winner-take-all market,” he said. “We’re probably more at a rising tide that lifts most boats, if not all boats.”

Investors who took early stakes in Rivian, Ford and Amazon included, are sitting on big gains. Ford’s Rivian shares were worth $ 10 billion at Wednesday’s closing price and Amazon’s at least $ 16 billion.

And Mr. Scaringe, the chief executive of Rivian, is also sitting on a fortune. His shares in Rivian are worth more than $ 1.7 billion. And this year, Rivian’s board of directors approved a new stock award for Mr. Scaringe that could be worth more than $ 7 billion if the stock trades up to $ 295.

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Newsrust - US Top News: Rivian, the electric truck maker, closes with a big gain after its IPO
Rivian, the electric truck maker, closes with a big gain after its IPO
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