Why Rivian Automotive Stock Is Set To Rally Today

Rivian Automotive Prices IPO Above Expected Range

Rivian Automotive priced its IPO at $78/share, so the company enters the marketplace with a valuation of $66.5 billion. In comparison, Ford is valued at $81 billion while General Motors has an $85 billion market cap. Previously, Rivian was expected to price its IPO at $72 – $74. It should be noted that premarket indications show that Rivian stock could open above the $120 level.

The company will raise $11.9 billion from the IPO, and it will have a lot of money to invest in its business. Traders and investors look ready to pay a major premium for the shares of the electric vehicle startup as they do not want to miss a high-growth story in a market that is trading near all-time high levels.

It should be noted that Rivian is supported by Amazon, which owns a roughly 20% stake in the company. Clearly, Amazon’s involvement serves as a material upside catalyst for Rivian shares as Amazon has the ambition to compete with Tesla in the EV market.

What’s Next For Rivian Stock?

The expected price range for Rivian’s IPO has been raised several times which highlights the strength of demand for the company’s stock.

There’s a lot of buzz around Rivian, and the stock has a decent opportunity to gain upside momentum in the upcoming trading sessions as many retail traders will likely rush to get a piece of another hot electric vehicle stock.

At this point, it’s too early to talk whether the valuation at IPO is justified, and the near-term direction of Rivian stock will depend solely on market sentiment.

The recent rally in Tesla shares showed that traders and investors are ready to pay a huge premium over stocks of traditional automakers, and Rivian stock will have an opportunity to ride the wave of investor enthusiasm. Traders should be prepared for fast moves as the stock will certainly experience elevated volatility in the next few weeks.

For a look at all of today’s economic events, check out our economic calendar.