Rivian IPO

[Crissa]

There's another thing I didn't mention here: The filing for an IPO is a march that's difficult to delay. They probably began the paperwork when they expected their trucks in people's driveways months before the IPO dates would get revealed.

My spouse's company has suffered from failed IPO dates before. They work for months to get ready, only for something external to happen to the market and they had to head off before getting as far as Rivian is today.

-Crissa

 

[Ogre]

There's another thing I didn't mention here: The filing for an IPO is a march that's difficult to delay. They probably began the paperwork when they expected their trucks in people's driveways months before the IPO dates would get revealed.

My spouse's company has suffered from failed IPO dates before. They work for months to get ready, only for something external to happen to the market and they had to head off before getting as far as Rivian is today.

-Crissa

This makes their September launch date that much more important. Be really interesting to see if they have some last minute QA or launch issues. Or just deliver a few token mostly hand built models in September and start trickling them out.

 

[FutureBoy]

Rivian’s $80 Billion Worth Reflects Confidence, Not Cash Flow

By
Kyle Stock
and
Edward Ludlow
August 30, 2021


A Valuation Based on Plans, Not Production
Is Rivian Automotive the $80 billion company it’s aiming to be in an upcoming IPO? That’s the number sources gave us in our scoop a few days ago, though the company hasn’t disclosed its target.

Well, we spent the weekend crunching the company’s estimated sales into our proprietary discounted cash-flow model, dialed in the WACC just right and voila…

Kidding, of course!

To an EV unicorn these days, cash flow is about as relevant as carburetors. And Rivian, having yet to deliver a vehicle, probably doesn’t have much of it to speak of. The $80 billion figure is a volatile mix of hopes and dreams, blended with 12 years of hard work and turbocharged with investment-bank swagger.

Is it fair and accurate? Who knows. Since the company isn’t really on the road yet, all we have are some general yardsticks, some tire-kicking. Tesla has a market cap of $713 billion at the moment. It took the company almost 20 years to top the $80 billion mark. In that time, Tesla produced almost 1 million vehicles and built arguably the world’s best charging network.

So Elon Musk is perhaps understandably a little chafed by the valuation Rivian is looking for.

Then there are Rivian’s electric-truck rivals. Ford, a 118-year-old startup, has a market cap of $53 billion at the moment, a number that doesn’t ascribe much to Bronco mania or thesurge in deposits for its battery-powered F-150 Lightning, due in the spring of 2022, or the smaller Maverick hybrid pickup debuting this fall. Ford at least has some upside in the IPO. It’s an investor in Rivian, having poured $500 million into the company in April 2019 and chipped in additional undisclosed amounts in more recent rounds. (Ford already disclosed a $902 million non-cash gain on its investment in Rivian in the first quarter.)

General Motors, another e-truck aspirant, is a $72 billion enterprise at the moment.


The takeaway from these casual comparisons: If Rivian does end up on the scrap heap of automotive history, it won’t be for lack of confidence. Of course, that is a large part of what it took to get to this point: 12 years of slogging away in a remote corner of the auto industry that no one had ever bothered to explore. Founder and CEO R.J. Scaringe started the company while blitzing to an engineering PhD at the Massachusetts Institute of Technology.

We might also infer from the blockbuster valuation that demand for the much-anticipated Rivian pickup and SUV may be even hotter than thought. The company has yet to reveal just how many orders it has, though some Internet sleuths have tried to triangulate the number.

Amazon's first custom electric delivery vehicle
Source: Amazon.com
There are also the intangibles, which will no doubt account for most of the “b’s” at the top of the roadshow deck. Most notably, Amazon already has ordered 100,000 delivery vans and is another major investor. There’s also the crowd of Tesla alumni in the ranks, some of the few folks in the world who know how to build both a car and a car company. And it’s hard to discount the wunderkind factor. Scaringe is by all accounts an engineering phenom and an emotionally intelligent polymath. Though he has no track record of bringing product to market, he has successfully pitched some of the world’s largest institutional investors and enlisted some industry gurus as advisers.

Do a deep-dive on Scaringe and you’ll find a wellspring of optimism matched with an almost manic attention to detail. Years before he had an assembly line, Scaringe was on podcasts obsessing about intelligent battery-charging software, resale values and what the ride-hailing landscape will look like in 2030. The dude is playing the long game and has been since Tesla sold its first car.

However much Rivian raises, it seems to know how to spend it. While production in Illinois is just getting started, the company is considering a $5 billion, 2,000-acre facility in Fort Worth, Texas, while also scoping sites in Europe.

As for the hardware, Rivian started building saleable trucks two weeks ago and is confident it will get the regulatory green light to ship them soon. The goal at the moment, according to people familiar with the matter: 100 deliveries in the month of September. Well, that and an $80 billion IPO in the following few months. If you are a stickler for unit economics, those will be very valuable vehicles.

Before You Go

A ChargePoint plug at a station in Los Angeles.
Photographer: Dania Maxwell/Bloomberg

Companies that make charging equipment for electric vehicles may have gotten shortchanged in President Joe Biden’s bipartisan infrastructure bill, but their future remains bright even without the extra help, Bloomberg’s Julia Fanzeres reports. Biden had mapped out plans to spend $174 billion to help build out EV infrastructure, which included money for public charging stations, consumer rebates for American-made EVs and a pledge to electrify the government’s fleet. While just $7.5 billion ended up being allocated to EVs in the bill, the sector is likely to see “tremendous growth” with or without the policy boost, according to Cowen analyst Gabe Daoud.

 

[Diehard]

This makes their September launch date that much more important. Be really interesting to see if they have some last minute QA or launch issues. Or just deliver a few token mostly hand built models in September and start trickling them out.

Rivian seem to control the information coming out about their products very tightly. I have not heard anything that is not positive. When I read Amazon reviews and I see 5 stars on every review, I get a bit suspicious. It seems like they are working hard to keep that image after deliveries but for a new vehicle, I would be shocked if there are not at least some negative press somewhere. I am sure Amazon is not going to give bad reviews for the van but if Sandy or some owner does, it may have some impact on the share price. All that said, I do like their products and the company and can’t wait for an unbiased independent review on production vehicles.