After a 29 percent gain on its first day of trading, Rivian shares rose a staggering 24 percent on Thursday.
Rivian Automotive Inc. reached a market value of more than $100 billion two days after the IPO, drawing comparisons to Tesla Inc.
But there are big differences: When Tesla went public in 2010, the Elon Musk-led company disclosed $93 million in revenues and losses, well below the $1 billion that Rivian reported for the first half. In addition, Tesla’s initial market cap was approximately $2 billion and only reached $90 billion in 2020.
Eleven years later, Rivian is the fifth largest automaker in the world by market capitalization, having supplied only a few electric vehicles to customers. After gaining 29% on their first day of trading, Rivian shares rose a staggering 24% on Thursday, pushing the valuation past General Motors Co.
“Along with Lucid’s IPO (LCID), the race to be the ‘next Tesla’ is in full swing and increasingly taking place in public markets,” Ben Laidler, eToro’s global market strategist, wrote in a note.
“Rivian’s valuation makes it a legitimate option for institutional investors who previously only had Tesla to play the electric vehicle space,” Nicholas Colas, co-founder of DataTrek Research, wrote in a note. Colas said some investors are crossing new companies as they go public, selling the “‘old’ name and replacing it with the ‘new’.”
For the Rivian believers, the support of Amazon.com Inc. and Ford Motor Co. the company an attractive purchase. “Investors have responded enthusiastically to Amazon’s support and the R1T pickup that has received critical acclaim since its recent launch,” said Russ Mold, AJ Bell’s investment director.
Traditional automakers are trying to grab the attention of investors with their own EV development.
“General Motors is so undervalued as we enter this wonderful era that we are in because we invested in electric vehicles more than three, four years ago,” Mary Barra said at The New York Times DealBook conference.