Rivian could look to trade publicly as early as fall; reports

Local News

NORMAL, Ill. (WMBD) — As electric car maker Rivian grows in McLean County it may be gearing up to hit Wall Street.

Yahoo! Finance and Bloomberg both reporting the company plans to go public as early as this fall. Both reports say the Initial Public Offering (IPO) of Rivian common stocks could come as early as September.

Edgar Norton, a professor of finance at Illinois State University said this will allow the public to buy into shares of the company.

“An IPO is an Initial Public Offering; so it’s the first time a company has its shares of common stock to everybody,” Norton said.

Although Rivian is backed by Ford, Amazon, and other major private investors, Norton said going public opens up more opportunities for growth.

“That money is expected to be plowed back into the company for expansion, for development,” Norton said.

Assistant professor of finance and accounting at Illinois Wesleyan University, Jaime Peters said right now, Rivian needs to bring in more money because of the upkeep of facilities.

“It is really expensive to run a car plant and so they need more cash, they’re consuming it as fast they’re raising it,” Peters said.

With more expansion and upkeep, comes more jobs and a major employer like Rivian has a trickle-down effect in a metro area the size of Bloomington-Normal. Norton said an expansion just doesn’t create jobs at Rivian, but in other sectors as well.

“Obviously the more people that are employed, that creates follow-on employment; you need more stores, shops, restaurants,” Norton said. “It creates all kinds of retail opportunities as well as opportunities for buying or building houses here.”

Peters said the timing is perfect for Rivian because the market is treating them as a technology company like Tesla, and not a manufacturing company, like General Motors or Ford.

“A company that is a technology company will often trade 30, 40, 80 times earnings. A manufacturing company will often trade 10, 15, 20 times earnings,” Peters said.

“If you look at recent statistics, it’s suggesting that Rivian, who has not produced a single car that’s on the road yet, is worth about $27-28 billion,” Peters said. “To give you context, Ford, who makes more than 6 million cars a year is only worth $43 billion.”

Normal Mayor Chris Koos said he sees that Rivian is invested in Normal and the surrounding area, by creating jobs. He said it’s “rewarding” to see the company that started as a “question mark”, grow into a viable force for the community.

“It’s been very gratifying to see this move so quickly as it has,” Koos said “It means a lot for the community and I think the end result will be bigger than Mitsubishi ever was.”

A spokesperson for Rivian told WMBD they declined to comment on the report and neither confirmed or denied going public.

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