For one of the most high-profile initial public offerings in recent memory, today will be a less-than-typical day.
Rivian, the electric car startup backed by Oprah Winfrey, became a rare company in the tech industry to actually start trading — instead of waiting for a morning “pop” — when it listed its shares on the New York Stock Exchange Friday morning.
After pricing its stock at $53, the company’s first official public trading did well.
As of noon ET, shares of Rivian were trading at $66.60, giving the company a valuation of more than $72 billion. That represents a very early sign of success for the luxury electric vehicle brand, which was founded by famed VC Bill Gross. The share price surpassed a valuation of $63 billion that was considered a possibility after the company set its IPO price.
An I.P.O. — also known as an Initial Public Offering — is considered the most liquid form of equity finance. In such transactions, an entity conducts an offering of shares to the public to raise cash for operating needs. An I.P.O. opens the doors for public shareholders to take ownership of the company. Typically, the price at which those shares are sold tends to be higher in the IPO than the price at which it was bought by an existing shareholder or a bank.
An I.P.O. is a rare event in the tech industry. Only a dozen high-profile IPOs have traded during the last year. Historically, fewer than a dozen companies trade on a given day, according to MarketWatch. As of Friday, only two IPOs have traded in the last month.
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In a note to the Securities and Exchange Commission last week, Rivian advised investors that it expects “an IPO to trade below the offer price for a small period,” according to a New York Times report. The company did not say why the IPO prices have been lower.
“It speaks to the fact that not everyone values a company as high as other investors do. That said, we believe with tremendous hard work and the hard work of our team that we can produce the best and the best-value vehicles for the market,” Rivian Chairman and CEO James Lee said in an interview with the New York Times.
Rivian’s median age is 29 years old. The company has announced it has raised at least $1.2 billion in investment dollars from a “wide range of investors,” according to the company’s latest filing with the SEC. The initial breakdown of funding on its website showed the biggest backers included institutional investors like BlackRock and Third Point and financial startup Founders Fund.
In September, Rivian announced the R1T, a high-end, large-format electric vehicle that will be able to tow cars, trucks and motorcycles.
The model, which is essentially a giant SUV, will be available for full retail pricing in March 2019. Rivian was founded in 2014 and revealed its first autonomous vehicle at the Consumer Electronics Show in Las Vegas last January.