Amazon-backed EV maker Rivian prices IPO shares above top of range, raises US$11.9b

[SAN FRANCISCO] Electric vehicle-maker Rivian Automotive priced shares in its initial public offering at US$78 apiece to raise about US$11.9 billion, the biggest first-time share sale this year.

Backed by deep pocketed companies such as Amazon.com and Ford Motor, Rivian is hitting the public markets as it looks to make a dent in the electric vehicle market led by Tesla.

Rivian sold 153 million shares in the offering, according to a statement confirming an earlier Bloomberg News report. The US$11.9 billion haul is the sixth-largest ever on a US exchange, data compiled by Bloomberg show.

The IPO comes as Rivian delivered its first vehicles, mostly to its own employees, just a couple of months ago. It will only produce about 1,200 units by year-end at its plant in Normal, Illinois. The company, which lost nearly US$1 billion in the first half of the year, estimates that annual production will hit 150,000 vehicles at its main facility by late 2023.

Based on the share count, Rivian is being valued at about US$76.4 billion on a fully diluted basis that accounts for stock options. That compares with a valuation of US$27.6 billion after a US$2.65 billion funding round in January, Bloomberg News previously reported.

Rivian had earlier marketed 135 million shares at US$72 to US$74 after elevating that range from US$57 to US$62, according to filings with the US Securities and Exchange Commission.

BIG BACKERS

Though it's a newcomer to the public market, Irvine, California-based Rivian's entry into the world of consumer electric vehicles has been more than a decade in the making. Founder and chief executive officer RJ Scaringe set up the first iteration of what would become Rivian in 2009 in his home state of Florida.

Over the years, it attracted a wide array of backers. As much as US$5 billion of the IPO shares are set to be bought by investors including Amazon, T Rowe Price, Coatue Management, Franklin Templeton, Capital Research Global Investors, D1 Capital, Third Point Investors, Blackstone, Dragoneer Investment Group and Soros Funds.

Rivian had a net loss of US$994 million in the first six months of 2021, compared with a US$377 million deficit a year earlier, according to its filings. Rivian expected to record a quarterly net loss of as much as US$1.28 billion due to costs associated with the start of production of the R1T.

Rivian plans to allocate up to 7 per cent of its shares to eligible US customers who had pre-orders as of Sep 30. To attract retail investors, up to 0.4 per cent of the IPO shares will be allocated to SoFi Securities LLC's online brokerage platform.

Scaringe is expected to maintain outsize influence over Rivian through a class of stock giving him 10 votes per share, compared with one vote each for the shares sold in the IPO.

The offering is being led by Morgan Stanley, Goldman Sachs Group and JPMorgan Chase & Co, with more than 20 banks listed on the cover page of its prospectus. Rivian shares are expected to begin trading Wednesday (Nov 10) on the Nasdaq Global Select Market under the symbol RIVN.

BLOOMBERG