Rivian, a company I really had no idea about until now, is the first $100 billion company & IPO with no revenue.
As of this writing, on any given quarter, they expect to generate $0 – $1 million in revenue. You can read this in their IPO prospectus. For the sake of the startup scene as we know it, they are pre revenue.
$100 billion valuation, $0 in revenue. Wow!
Sure they say they make cool electric cars, and it looks like Amazon backs them, and they have some potential deals to fuel Amazon’s fleet of cars, maybe some software too, but at $100 billion the execution basically has to be flawless from this point on. I mean, flawless.
I have no problem with the valuation, by the way. I’m not involved and I probably will not ever trade the stock. So for me, people can value Rivian however they want – I am just fascinated. Tesla is worth $1 trillion and it took them 10+ years to get there with an insane number of obstacles and controversies.
As an investor, I am also curious about the opportunity of Rivian – the risk reward of it all. Best case scenario you 10x your money and this car company goes ballistic to $1 trillion and competes with Tesla.
But how much has to go right? How perfect does it have to be for the next 5 or 10 years? The smallest hiccup and it probably gets cut in half. Bad PR, inferior software, weak production lines, there is so much that could go wrong relative to what they need to do right.
Anyways, that’s the post, just me thinking out loud about an IPO that I consider to be pretty historic. I am still left with a few questions:
• How are bankers selling an IPO like this?
• Who is buying this IPO from bankers?
• What is the bull case that I am missing?
• How funny/hilarious is its IPO roadshow deck? Btw, I need to check their IPO roadshow out – “Investors? Possibly you!”
A trader who I met the other day told me to just buy the meme economy. That’s all that matters now. Buy the dumbest thing you can think of! Profit! I look forward to reading this post 5 or 10 years from now. I hope I am terribly wrong, because I do support innovation and growth.