Rivian, the electric car company backed by Amazon, is aiming for a $53 billion valuation when it goes public on the NASDAQ. The company has not yet set an exact date for its debut but sources claim that it could be as soon as next week.
The company plans to begin trading at a value greater than rival carmakers Kia and Nissan at the top end of its range of $57 to $62 per share. Rivian is set to raise around $8.4 billion through the deal.
The planned IPO comes despite the company's mounting losses - about $1 billion in the first half of this year - as it develops its mass-production capabilities for its planned electric vans and trucks.
According to a revised prospectus issued on Monday, Rivian said it already has commitments from investors such as Blackstone, T Rowe Price, and Daniel Loeb's Third Point. The group of investors is planning to acquire up to $5 billion of Rivian's stock at its offering price.
With a 22.4% stake, Amazon is currently Rivian's largest stakeholder. According to the prospectus, the e-commerce company has shown interest in acquiring $200 million in additional shares during the IPO. The stock's market debut would also be a windfall for founder RJ Scaringe, who controls more than 17.6 million shares worth $1.1 billion at the top of the price range.
Rivian's investors are banking on the company to position itself as a formidable rival against Tesla in the commercial vehicle market. Confidence in the company's prospect had recently been bolstered by Amazon's purchase of 100,000 custom-built delivery vans for its logistics network.
The electric vans ordered by Amazon are expected to be delivered by 2025, and a small number have already been tested in numerous U.S. states. Amazon's attempts to minimize its carbon impact are centered on the vans, with the company pledging to be carbon-neutral by 2040.
However, Rivian warned in its risk factors that because Amazon will account for a "substantial amount" of its first income, any disruption to that deal could be significant.
As part of its deal with Amazon, the company agreed to certain exclusivities and limitations. The deal effectively limits Rivian's ability to do business with other logistics companies interested in becoming electric.
Aside from the Amazon contract, the business reported "little income" from sales of its R1T pick-up truck since its September launch and "no revenue" from any other vehicle sales.
However, Rivian said it has received more than 50,000 pre-orders for the R1T and R1S last month. According to Monday's filing, the business aimed to have delivered 1,000 R1Ts and 15 RISs to clients by the end of the year.
