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Shares of Rivian, which has ambitious plans to make electric trucks and delivery trucks, rose on its first day of trading Wednesday, pushing the company’s market value higher than that of major established automakers, even before significant production began.
Rivian priced its IPO at $78 per share on Tuesday. It started trading at $106.75, up 37 percent, giving it a market capitalization of over $90 billion, higher than Ford Motor’s $80 billion and General Motors’ $86 billion.
The company started selling its vehicles. By the end of last month, it had delivered just 156 pickup trucks marketed to well-off consumers who love the outdoors.
In the offer, Rivian has raised nearly $12 billionmaking its IPO one of the largest in recent years. The company expects to spend billions of dollars to expand its manufacturing facilities. In the first half of the year, Rivian lost $994 million when it lost $1.02 billion, almost as much as in the entirety of 2020.
Investors have shown their readiness to ignore the losses of some electric vehicle manufacturers, hoping that they will eventually make big profits as electric vehicles have an increasing share of the automobile market.
Also, Tesla’s success shows that a new entrant can surpass the old automakers. Stocks are up nearly 50 percent this year, giving the company a market cap of nearly $1 trillion. sharp drop this week.
Rivian may also attract buyers because of its relationship with Amazon, which ordered 100,000 delivery trucks from Rivian and took a large stake in the company. Ford is also an investor.
For a time, Tesla had many problems with production, which often drove its stock price down and its company was short of cash. Rivian’s CEO, RJ Scaringe, now has to try to increase production when supply chains are not working as efficiently as they did before the pandemic.
In addition to its pickup, Rivian plans to make an SUV recently, saying it doesn’t expect to fulfill 55,400 orders for trucks and SUVs by the end of 2023.
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