Rivian I.P.O. Is Embraced by Investors Looking for Another Tesla

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Charging remains a challenge for all electric car companies. While there are stations in many urban centers, there are fewer in the suburbs, and many less densely populated areas lack charging infrastructure. This could be a particular challenge for Rivian, as it expects owners to send its vehicles off the beaten path, where the nearest charging station may be miles away.

The big question hanging over fledgling EV makers is whether they have enough cash to fund their expansion when sales are still low. Rivian has spent $ 3.5 billion in cash on operations and capital expenditures from early 2020 to the end of June this year. But Rivian appears to be able to fund its expansion in the near future. At the end of September, he had just over $ 5 billion in cash, and the IPO would bring in nearly $ 12 billion.

Rivian’s IPO was one of the largest in recent years, surpassing Uber’s 2019 offering, which raised $ 8 billion. But that’s less than Facebook’s $ 17 billion offer in 2012. Companies have raised $ 290 billion so far this year in 901 deals, up from $ 169 billion in 457 deals last year, according to data services company Dealogic. The stock market plays a critical role in redirecting money to new sectors of the economy, including companies that are adopting green technologies.

But according to some analysts, investors are simply spending money on what is currently popular and not doing enough to determine which companies are really strong. “The market pricing mechanism is broken and you see no real success,” said Mr. O’Rourke of JonesTrading.

But Mr. McDuffie. Professor Wharton said he believes there is ample potential for the success of many companies in the electric vehicle market. “This is not so much a winner-take-all market,” he said. “We probably lift most boats more, if not every boat at high tide.”

Investors who previously acquired stakes in Rivian, including Ford and Amazon, have made big profits. Ford Rivian was worth $ 10 billion at Wednesday’s close, while Amazon was worth at least $ 16 billion.

And Mr. Scaringe, the CEO of Rivian, is also sitting on a fortune. His shares in Rivian are worth over $ 1.7 billion. And this year, Rivian’s board of directors approved a new share premium for Mr. Scaringe, which could be worth more than $ 7 billion if the share price hits $ 295.

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