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ETFs to Tap on Rivian's High-Profile IPO Plan

Rivian Automotive, the electric-vehicle start-up backed by Amazon.com (which has 20% stake in the start-up) and Ford Motor (F) has reportedly filed for an initial public offering and is seeking...

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This story originally appeared on Zacks

Rivian Automotive Inc., the electric-vehicle start-up backed by Amazon.com Inc. AMZN (which 20% stake in the start-up) and Ford Motor Co. (F) has reportedly filed for an initial public offering and is seeking a roughly $54.6 billion valuation, according to its amended prospectus filed Monday, as quoted on CNBC.

- Zacks

If the target is achieved, the electric vehicle maker would be potentially almost as valuable as rival Honda Motor. It plans to list on the Nasdaq under the ticker symbol “RIVN,” according to Rivian’s IPO prospectus filed last month.

The company said it plans to offer 135 million shares priced between $57 and $62, with an option for underwriters to purchase up to 20.25 million additional shares. At the high end of that range, Rivian would make roughly $9.6 billion in its market debut, considering underwriters exercise that option, the CNBC article noted.

It would make Rivian the third-largest initial public offering by funds raised in the past decade in the United States. Only three other companies (Alibaba, Meta Platforms and Uber) have raised more than $8 billion while going public since 2011, according to data from Dealogic, as quoted on CNBC.

The startup Rivian was valued at $27.6 billion in a funding round in January, Bloomberg News reported, as quoted on Yahoo Finance. Rivian raised $2.65 billion in the round from a group of investors led by T. Rowe Price Group Inc. (TROW).

Overall, it raised more than $8 billion since the start of 2019 from investors who expect its battery-electric pickup and SUV to gain market share in the United States. Needless to say, Rivian is likely to be one of the highest-profile (with big names in its board) competitors to Tesla Inc. TSLA.                            

Since last year, companies in the EV space are appearing red-hot, especially among SPAC investors as they are looking for a Tesla-like investment.  Notably, Tesla is up 57.9% this year and 211.5% past year. Tesla shares recorded their biggest monthly rally in almost a year to cap October. It became a trillion-dollar company in the month.

Rivian is manufacturing commercial last-mile delivery vans for Amazon, which has said it plans to have 10,000 vans on the road by 2022 and 100,000 by 2030. Rivian also beat Tesla, GM and Ford to the market with an electric pickup, the R1T, which has been well-accepted by users. The company plans to deliver 1,000 RITs by the end of the year.

The ongoing global push for restoration of climate, President inclination for the same, emerging countries’ pledge for being carbon-neutral in the COP-26 Glasgow and the higher demand for alternative energy amid the fossil fuel rally are great for electric vehicle’s future.

ETFs to Gain

With automation and technological breakthrough emerging rapidly, fast pickup in electric vehicles is in the cards. Tesla’s success is known to all by now. Most big-shot companies, including Apple (AAPL), are also eyeing the space.

Renaissance IPO ETF IPO is likely to add the company once it is public. IPO is a portfolio of newly U.S.-listed initial public offerings of companies whose unseasoned equities are under-represented in the core U.S. equity indices. IPOs that meet liquidity & operational screens are included in the index at the end of the fifth day of trading, or upon quarterly reviews, weighted by tradable float, capped at 10% and removed after two years.

Moreover, a few electric-vehicle ETFs like Global X Autonomous & Electric Vehicles ETF DRIVSPDR S&P Kensho Smart Mobility ETF HAILiShares Self-Driving EV and Tech ETF IDRV and Simplify Volt RoboCar Disruption and Tech ETF VCAR may also add this high-profile stock after it goes public. Investors can track the event closely and bet on the EV ETFs beforehand.



 



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