Zhongxin Jingwei, December 14 (Yang Jingchuan) Rivian, known as a "Tesla competitor", landed on the NASDAQ on November 10 this year, and the financing amount of $12 billion is also the world's largest IPO during the year. As of the close of trading on December 13, Rivian was quoted at $118.90, up 3.70% from the previous session, with a total market capitalization of $103.238 billion, second only to Tesla and Toyota, ranking third in the world.
R&D investment increased
According to public information, Rivian was originally named Mainstream Motors and was founded in 2009. As of last month, Rivian has more than 9,000 employees, and it mainly sells two models of new energy pickup trucks, including R1T pickup trucks and R1S SUVs. In the prospectus, Rivian said trucks and SUVs are the fastest-growing and most profitable automotive industry, accounting for more than 70 percent of new car sales in the United States and contributing most of the profits of existing automakers.
According to the prospectus, Rivian faced a huge loss, losing $995 million in the first half of this year, a total loss of $994 million attributable to shareholders' equity attributable to the parent company, and total assets of $6.49 billion. In 2019 and 2020, Rivian lost $426 million and $1.018 billion, respectively. Rivian also said it expects a loss of up to $1.28 billion in the third quarter.
Image source: Rivian Prospectus
However, Rivian's R&D investment is growing. From 2019 to 2020, R&D investment was US$301 million and US$766 million, respectively; in the first half of this year, its R&D investment reached US$683 million.
Image source: Public information collation, flush iFinD
As of Nov. 12, Amazon held a total of 159 million shares in Rivian, or 18.37 percent; it was followed by T. Rowe Price Associates, Inc., holds 15.35 percent; Ford holds the third highest stake, at 11.74 percent. But on Nov. 19, Ford announced that it would no longer work with Rivian on electric vehicles and canceled a previous strategic agreement.
Image source: Flush iFinD
Rivian's IPO price was $78 per share, more than the cap on the initial offering price of $62; the size of the offering was 153 million shares, also higher than the 135 million shares the company had originally planned to issue; and the valuation was more than $77 billion. Morgan Stanley, Goldman Sachs and others co-sponsors.
On the secondary market, Rivian opened 37% higher at $106.75 on the first day of listing (November 10), and rushed to a new high of $179.47 on November 16. Since then, Rivian's stock price has retreated, closing at $104.67 on December 3, down nearly 40% from its highest. As of the close of trading on December 13, Rivian was trading at $118.90, down 0.72% since entering December.
With only 156 vehicles delivered, Musk mocked many times
Unlike Tesla, which focuses on new energy passenger cars, Rivian has chosen an electric pickup track that is more popular in the United States since its transformation in 2011. The high valuation of Rivian is related to its positioning in the pickup truck and SUV markets to some extent.
But Rivian's operating figures are dismal. According to Rivian's previous disclosure, as of the end of October 2021, Rivian has received a total of about 55,400 orders for R1T pickup trucks and R1S SUV models in the US and Canadian markets, and is expected to be fully delivered by the end of 2023. But by Oct. 30, Rivian had produced a total of 180 R1T cars, delivering only 156 of them.
Before Rivian's IPO, Musk was critical of its high valuation. Musk has said on Twitter that "perhaps they (Rivian) should be required to deliver at least one car for every $1 billion valuation before the IPO." ”
Image credit: Musk Twitter
After The market value of Rivian exceeded 100 billion, Musk once again said sarcastically, "I hope that Rivian can achieve mass production and positive cash flow, which is the real test that the company is facing." Of the hundreds of auto startups in the U.S., whether fuel or electric, Tesla is the only automaker in the last 100 years to achieve mass production and positive cash flow. ”
At present, Tesla's total market capitalization is $970.532 billion, and the net profit attributable to common shareholders in the third quarter is $1.618 billion. In terms of production and sales, Tesla's global production in 2020 was 509,700 units, and sales were 499,500 units; in the first three quarters of this year, Tesla's cumulative global production and sales reached 624,500 units and 627,400 units, respectively.
Rivian has previously said it is ramping up production of the electric pickup truck R1T, with a goal of delivering about 1,000 vehicles by the end of the year; and 100,000 electric vans to Amazon by 2025.
Compared to Tesla, Rivian still has a long way to go. It's worth noting, though, that Rivian mentioned in its prospectus that the company's plant in central Illinois can already produce up to 150,000 cars a year.
As of now, there are many institutions that are optimistic about the future development of Rivian. Morgan Stanley recently gave Rivian an "overweight" rating, as well as a $147 price target, meaning rivian has more than 20% upside based on the latest closing price.
The report also notes that "Rivian not only has a convincing product, strong management, and stable capital injection, but also supports a strategic relationship with Amazon," adding that the company is "the one who can challenge Tesla."
Mizuho Bank analyst Vijay Rakesh also gave Rivian a "buy" rating for the first time with a price target of $145. Rakesh said in a research note that after Tesla, Rivian is "redefining the electric car market." ”
But Goldman Sachs analyst Mark Delaney rated Rivian only "neutral" with a price target of $94. The analyst noted that Rivian has an attractive product portfolio and growing brand influence, but historically, the auto industry has struggled to get new entrants to scale up, including electric vehicles. It also said Rivian "already has a sizable premium"; it is expected to consume about $20 billion in cash from the fourth quarter of 2021 to 2025.
However, Zhang Xiang also pointed out that the high heat of Rivian also does not rule out the speculation and momentum of the shareholders behind it, and in the case of only 156 vehicles delivered, "the market value may be so high that it may not be worthy of the name." (Zhongxin Jingwei APP)
(The views in this article are for reference only and do not constitute investment advice, investment is risky, and you need to be cautious when entering the market.) )
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