Rivian indicated to open at $120 a share in IPO
Yahoo Finance’s Pras Subramanian, Brian Sozzi, and Julie Hyman break down Rivian’s biggest investors.
Video Transcript
- Yeah no regrets over-- if you're an investor in Rivian here. We're getting some early indications, guys, here. Rivian indicating to open at $120 a share according to our very own Jared Blikre. Let's keep in mind that IPO priced at $78. The market cap for Rivian, just based on this, about $108 billion, for some perspective. Ford and General Motors, their combined market caps $165 billion. Let's bring in our senior auto correspondent, Pras Subramanian. Pras, these are eye popping numbers for a company not making any money today, tomorrow, or a year from now here. What's your take?
PRAS SUBRAMANIAN: So, I'm just amazed here, right? So, we had a $78 IPO price last night. I mean, this was up from 72 to 74 that they had suggested last Friday. And then this is up from 57 bucks that was the initial range, when they first were talking about this.
So, you know, it's just amazing, the amount of demand here for the shares, institutional buying as well. I think a lot of the bigger shareholders are going to be buying into this IPO as well. And then I think the underwriters have another under 30 million shares that they can offer.
So, this is just like a moment of momentum, like just a lot of momentum here, with buyers into the shares here. Like we were talking earlier, before the break, it might-- maybe the midday, we'll see the actual trading on the exchange, on the NASDAQ. But it could even pop more than this size. It's already 120 right now.
- Yeah, let's pick out the winners here, Pras. It is Amazon, invested early in this company here, sitting on a potential large paper gain. And also Ford, a company you and I have covered for some time, potentially sitting on a couple billion in paper profits, if I have my back of the envelope math right. I mean, wow. I mean, that is going to be a big cash infusion to for that they could put to their own electric vehicle efforts.
PRAS SUBRAMANIAN: Right. Nice windfall for Ford. Amazon doesn't need the money, but they'll take it. We've already seen Jeff Bezos, I think, tweet about getting his last mile delivery vans from Rivian. A lot of this money size, you know, are going to go towards helping them build capacity and production. But you know, I don't know if you guys think, but did they underprice it? I mean, could they have got more money? They're going to get around, what, $10 billion from this offering? Could they have gotten 20? I mean, it seems like they could have.
- Yeah, Pras. You know, something else that's funny as we look at Rivian, not just versus the traditional car makers, but versus something like a Tesla, you know, a lot of people obviously are commenting on Rivian today. One of them is a venture capitalist on Twitter. And I love this tweet. He said Rivian equals Tesla without memes. We'll now be able to know the value of memes as the price Delta. Like, because obviously, we see-- what is his name now, Lorde Edge? Elon, a.k.a. Elon Musk on Twitter, who obviously does a lot to sort of juice Tesla at various times.
Rivian doesn't have that. I mean, it has obviously a huge amount of buzz. And it also has a founder who is supposed to be quite a character. But at least, not that I've seen, has he been sort of dominating on Twizner-- Twitter. Twizzler? --in terms of Rivian memes, at least not yet.
PRAS SUBRAMANIAN: Yeah, you know, RJ Scaringe, CEO and founder of Rivian, he's a very low profile. He's on Twitter here, and they're talking about customer deliveries and milestones the company's hit. But he's not on there talking about what kind of things that Elon is. Like, I'm concerned about capital gains and things like that, and unrealized tax avoidance. I need to sell my shares. And talking about slamming deals like the Hertz deal that they had.
You're not going to hear RJ Scaringe slam a deal that he has with Amazon or whoever. Keeping a low profile, smart guy, kind of pivoted at the right time. Knew his market. Clearly, there's a lot of interest there and in his product. So, yeah, is Rivian the Tesla without the meme hangover? I guess so.
- Pras, real quick, have you driven one of these Rivians?
PRAS SUBRAMANIAN: I have not, Soz. I've been trying to get my hands on one of these. Hopefully, post-IPO, they'll be able to give out some press vehicles for us to test outside. I know you're not gonna probably go for a ride somewhere, Long Island, probably. But I'm very interested in trying it out. See how it compares to the Ford F-150 Lightning. They look very different. I'm curious if they actually drive different, too.
