Rivian shoots 37 percent higher on first trading day
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Rivian shoots 37 percent higher on first trading day

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Just as investors are putting the brakes on sector pioneer Tesla, they are running a storm for the producer of electric pick-ups as the ‘next best thing’.

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Rivian shoots 37 percent above the IPO price of $78 on Wednesday evening with an opening price of $106.75. The opening price gives the company a value of $91 billion.

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To say investor interest was high seems to be the understatement of the year. Initially, the price range was 57-62 dollars, which was later sharply raised by the accompanying investment banks to 72-74 dollars. And in the end it was pinned above the top of the raised fork.

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The result: With the 153 million shares offered, the twelve-year-old project of MIT alumnus Robert (‘RJ’) Scaringe is raising nearly $12 billion (10.3 billion euros). Rivian thus signs for the largest Wall Street IPO of the year.

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Investors value the Amazon and Ford electric pickup truck builder at $77 billion. The Wall Street Journal business paper notes that the Rivian bankers at the road shows purposely compared it to Tesla

. An argument that clearly caught on, although Rivian is much less advanced than Elon Musk’s company.

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Tesla delivered over the last four quarters finished more than 800,000 cars and generated nearly $3.5 billion in net profit on $47 billion in revenue over the same period.

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Rivian, on the other hand, only delivered its first cars this fall. According to it prospectus as of October 31, exactly 156 units of the R1T model, almost all of them to our own employees. In the first six months of 2021, there was no turnover and a loss of just under $1 billion. This is due to the start-up costs for the R1T, a seven-seat SUV. By the end of this year, the factory in Normal, Illinois, 1,200 pickups should be rolled off the production line.

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However, the financial data seems to be of secondary importance in the story. Fomo seems more important to large investors: fear of missing out. They are rare, the investors who have made just about the entire stratospheric climb of Tesla (see chart) experienced. One of the few is the Scottish group Baillie Gifford, courtesy of administrator James Anderson. And so no one wants to miss the train as potentially ‘the next best thing’ is buzzing towards Nasdaq.

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A number of investors may also switch away from ‘the first best thing’, in other words Tesla. The electric car pioneer tumbled 12 percent on Nasdaq on Tuesday. Since Elon Musk stated via a Twitter poll to sell a tenth of his piecesTesla’s stock market cap has capped $200 billion.

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