Rivian’s $3bn IPO in electric truck market is a rare bright spot

Rivian, which makes alternative vehicles is shutting down to focus on fundraising. But its company stock has posted a big gain, suggesting investors still like what they saw.

Both sales and gross margin were stronger-than-expected, and the company came close to meeting its breakeven point. To top it off, they expect no write-offs for a couple of years and a profitable business line exiting the year. That’s a big win for Rivian in a year where other innovative firms have reported disappointing results from their IPOs, such as Chobani and ModCloth. Even if it hasn’t set a number on when it expects to make money, Rivian apparently has optimism on investors.

Rivian’s debut earlier this year was described by Bloomberg as “The Electric-Truck Maker Set To Dance.” That reputation certainly continued with the company’s performance on Friday, as its shares rose nearly 50% to close at $3.81 in the Nasdaq market. The company had been trading as high as $17.69 earlier this year, and a year ago had an $860 million valuation.

The company’s intent is to build a 2,300-mile network of electric transportation network and offer goods to be delivered, and all of them will be electric and battery operated.

It is possible the stock will remain range-bound or go higher until investors really understand the plan and its potential for profits. As long as the plan is a viable business one, then the stock should be in high demand. This comes at a time when electric vehicles are being showcased all over, with Tesla’s Model Y being just unveiled in May. They also talk about changing car ownership into the care economy, which is supposed to reduce maintenance and purchase cost.

The company also makes a trackable electric motorcycle. A Rivian vehicle could hold to the Tesla models but run longer with better range, better powertrain and is only a fraction of the price of a Tesla.

Tesla Model Y. Photograph: Brandon Wade/WireImage

Despite all the positive things they have achieved in the past several months, Rivian is feeling the heat. Nasdaq recently raised a red flag to establish if the company can still earn a profitable business.

The Competition: Rivian Gives Electric Three-Degree Legs

Even though Rivian had made a strong comeback recently, they announced they are shutting down as a company and finding other ventures to move forward with.

There will be a decrease in employee count, but, there will still be the option to acquire. When and if a strategic investor takes it over, it’s possible a shareholder could be happy with the business. It’s a good move by Rivian’s management and the company is in a good place.

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