In the world’s largest IPO this year, Rivian Automotive Inc.’s stock rose as much as 53% on Wednesday, giving the Amazon-backed electric vehicle (EV) manufacturer a market value of more than $100 billion.
Rivian’s stock traded at $100.73, up almost 30% from its initial public offering.
It is now the second most lucrative automaker in the United States after Tesla Inc, which is valued at $1.06 trillion. Rivian scored above General Motors Co. with $86.05 billion, Ford Motor Co. with $77.37 billion, and Lucid Group with $65.96 billion, despite just beginning to sell vehicles and having little income to declare.
A global supply-chain bottleneck is also preventing Rivian from ramping up manufacturing in Illinois. EV producer says COVID-19 and its impact on suppliers delayed the launch of vehicles in Illinois in July.
In the past year, electric vehicle companies have become some of the hottest investments. Rivian’s fully diluted value at its first public offering (IPO) reached more than $106 billion, including options and restricted stock units.
Rivian raised around $12 billion through the IPO, a total amount that could rise to $13.7 billion if the complete over-allotment of shares is exercised. The IPO is the largest in the United States since Alibaba Group Holding Ltd went public in September 2014.
In an interview, Rivian Chief Executive R.J. Scaringe stated that the company’s transition to becoming a public company and the increase in its capital base allows the company to develop “promising products and volumes as well as growth in new segments and new vehicles.”.
A pair of Wall Street’s largest institutional investors, T. Rowe Price and BlackRock, expect Rivian to be the next big competitor in a field dominated by Tesla Inc, amid rising pressure on automakers in China and Europe to reduce emissions.
Rivian’s largest shareholder, Amazon.com Inc, owns 20% of the entity.
Rivian’s IPO aligns with the United Nations Climate Summit, which saw automakers, airlines, and governments commit to reducing global greenhouse gas emissions.
GM CEO Mary Barra said Wednesday that Rivian’s IPO only proves how undervalued her company is.
“What it reveals to me is the tremendous opportunity,” she said at a New York Times event. General Motors is undervalued.”