How to buy Rivian Pre-IPO stocks.

Aroohoo

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Yes that's the way I interpret it, I'm just getting into stocks so not sure if they can have another round of pre-ipo or not, if not it seems I'm out of luck
There are several ways to get pre IPO shares as a non Rivian associated person:
  1. You were offered the chance to get in as an angle or at Series A, B, C, etc funding.
    • The ship has sailed on this one
  2. You pick up share through a secondary pre-IPO market. These are some times used by employees with equity in a pre IPO company to cash in when they leave the company.
    • I doubt any one will be willing to offer up shares with the IPO around the corner.
  3. Buy it indirectly through inventing in firms that are known to have Rivian as an investment (Amazon, Ford, T Rowe Price, etc)
#1 and #2 aren't likely, maybe you can find a way in on #3.

As others have stated, if you want to pick up shares at this point it would have to be on the open market or if you can get in on the shares they are reserving for pre order holders. I suspect the price for the pre order holders will be the issue priced (which may be higher or lower than the current market price when you execute the transaction).
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Aroohoo

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The bankers do their darnedest to make sure the stock has a strong opening day. That means the IPO round gets priced low relative to what they believe demand will be on the exchange the following day. This creates tension because the company is selling new shares -- and the higher price they sell them for, the more cash they put in their coffers. But you don't want to sell them so high that the stock trades down the next day.
Remember the Facebook IPO? The underwriters/banks had their trading desks buying to provide a support level near the $38 IPO price for the first week or so because it was getting hammered. Eventually, they gave up and the price settled at $26 1 week after and was ~$20 2 months after.
Obviously it eventually found a footing and is worth much more now...

This is a case of the pre-IPO market being very thin and not being able to put a 'appropriate' value on the company. Anyone's guess to what the market will value Rivian at. My personal opinion is that based on a DCF, 80B is over priced unless we are looking at Tesla level multipliers.

Side note, we do know that their Series F was at $36.85 per share. What we don't explicitly know is the post-money valuation at that time...a guess would be 17-25B based upon that price and the >5% share ownership disclosure in the S1. Although a 80Billion valuation has been floating around, based upon the assumed valuation above, I wouldn't expect Rivian to offer at less than a $40Billion valuation such that those that got in at the Series F will still see a handsom profit even with dilution.
 

DucRider

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Side note, we do know that their Series F was at $36.85 per share. What we don't explicitly know is the post-money valuation at that time...a guess would be 17-25B based upon that price and the >5% share ownership disclosure in the S1. Although a 80Billion valuation has been floating around, based upon the assumed valuation above, I wouldn't expect Rivian to offer at less than a $40Billion valuation such that those that got in at the Series F will still see a handsom profit even with dilution.
This gives some indication of what they expect:

Convertible Promissory Notes
In July 2021, we issued the 2021 Convertible Notes to certain investors in aggregate principal amount of $2.5 billion. The 2021 Convertible Notes mature on July 23, 2026 and accrue interest quarterly at a rate of (i) zero percent (0%) from the date of issuance to, and including, June 30, 2022 and (ii) five percent (5%) after June 30, 2022. Upon the closing of this offering, the 2021 Convertible Notes will automatically convert into shares of our Class A common stock at a conversion price equal to the lesser of: (i) $71.03 (subject to appropriate adjustment in the event of any stock dividend, stock split, stock combination, recapitalization or any other similar transaction) and (ii) the product of (x) the initial public offering price per share multiplied by (y) the applicable discount rate determined by reference to the time of conversion (0.85 until December 31, 2021). Assuming an initial public offering price of $ per share (which is the midpoint of the price range set forth on the cover page of this prospectus), the 2021 Convertible Notes will convert into shares of our Class A common stock upon the closing of this offering.​

This seems to say they expect the IPO price to be >~$85 ($71.03/.85 = $83.56). My guess is they are targeting somewhere around $100/share
 

Aroohoo

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This seems to say they expect the IPO price to be >~$85 ($71.03/.85 = $83.56). My guess is they are targeting somewhere around $100/share
Doesn't this just set a ceiling on the common share price that their debt holders can convert to? i.e., it sets a maximum value amount that the debt notes can be converted to? I'm struggling to see how that directly influences offer price, maybe it gives an idea of the upper end?

Either way, isn't it about total valuation, not individual stock price?
 
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timesinks

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Remember the Facebook IPO? The underwriters/banks had their trading desks buying to provide a support level near the $38 IPO price for the first week or so because it was getting hammered. Eventually, they gave up and the price settled at $26 1 week after and was ~$20 2 months after.
Obviously it eventually found a footing and is worth much more now...
It's priced to pop, but that doesn't mean it always will. FB definitely erred more on the side of not leaving money on the table. Most companies aren't going to have quite as much sway with their underwriters.

Then you often have downward pressure after the initial hype, and especially as those 6-month insider lockups expire. Plenty of stocks will eventually lose those day 1 gains, some sooner than others. But most are going to close day 1 higher than their IPO price -- that's just how the game is rigged.
 

Aroohoo

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It's priced to pop, but that doesn't mean it always will. FB definitely erred more on the side of not leaving money on the table. Most companies aren't going to have quite as much sway with their underwriters.

Then you often have downward pressure after the initial hype, and especially as those 6-month insider lockups expire. Plenty of stocks will eventually lose those day 1 gains, some sooner than others. But most are going to close day 1 higher than their IPO price -- that's just how the game is rigged.
Pretty sure there isn't a price yet, so can't say it is "priced to pop". That said, it is always good press if it is valued such that there is a jump on the first day or two. The rationale side of me finds it hard to believe that there is much upward near term potential on a 80B valuation.
 

timesinks

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Pretty sure there isn't a price yet, so can't say it is "priced to pop". That said, it is always good press if it is valued such that there is a jump on the first day or two. The rationale side of me finds it hard to believe that there is much upward near term potential on a 80B valuation.
In context, that was a statement about IPOs in general. But there's also no way they "guessed" at their 80B figure. I give it a 90% chance of having a good first day whenever they go out. First 6-12 months? That's anyone's guess.
 

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It's nice of them to allocate shares to reservation holders, but I'm going to pass if it prices @ an $80B valuation, as I'm confident it will subsequently be available for less on the open market.
 

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How will reservation holders get in on this? I assume we'll get some email at some point inviting us to participate?
 
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hola29

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Before I evaluate price, I always look at these three metrics (and submetrics within each category): Tech, Timing, Team

Almost all investments require some degree of unknowns, but from my seat, reading the S-1, looking at the 30+ year product runway, seeing the reviews, and with a LE on order I am not scared away at the valuation....

So all three of my boxes are checked.

I have not started looking at financial metrics, but just napkin, slap on a price/sales of 15, so $80bln/15 is $5bln. They should do a significant portion of that just in Amazon business. I won't dive anymore in as this is not a finance board, but it's not crazy expensive at first glance. I'll dive deeper before I end up pulling the trigger on a lot, but I'd def buy a token amount regardless.

It's nice of them to allocate shares to reservation holders, but I'm going to pass if it prices @ an $80B valuation, as I'm confident it will subsequently be available for less on the open market.
 

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Before I evaluate price, I always look at these three metrics (and submetrics within each category): Tech, Timing, Team

Almost all investments require some degree of unknowns, but from my seat, reading the S-1, looking at the 30+ year product runway, seeing the reviews, and with a LE on order I am not scared away at the valuation....

So all three of my boxes are checked.

I have not started looking at financial metrics, but just napkin, slap on a price/sales of 15, so $80bln/15 is $5bln. They should do a significant portion of that just in Amazon business. I won't dive anymore in as this is not a finance board, but it's not crazy expensive at first glance. I'll dive deeper before I end up pulling the trigger on a lot, but I'd def buy a token amount regardless.
A 10,000 vehicle commitment to Amazon, assuming a $75,000 cost per unit is $750,000,000. More likely that Amazon is getting a much better price so the entire 10-year run will be about $5-$6B. So your math is off.
 

Chris S

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I invest in companies for earnings and. cash flow, not sales, so price/sales isn't that meaningful as a valuation metric to me. Also, they need to have delivered the #'s, not just have a shot at achieving them at some undeterminable future time.
 

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Do you mean 100,000 x 75,000 to be delivered through 2024? Which would be $7.5bln/4 years. I have no clue what the vans cost or if Rivian is also selling in services or service contracts. Which as I said is a significant portion of of their valuation...

Think your information is off :)

A 10,000 vehicle commitment to Amazon, assuming a $75,000 cost per unit is $750,000,000. More likely that Amazon is getting a much better price so the entire 10-year run will be about $5-$6B. So your math is off.
 

hola29

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Then you miss out on a lot of great early entry opportunities...but everyone has their own strategy.

I invest in companies for earnings and. cash flow, not sales, so price/sales isn't that meaningful as a valuation metric to me. Also, they need to have delivered the #'s, not just have a shot at achieving them at some undeterminable future time.
 

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I spoke to my financial advisor about this. He believes that there will be some sort of notification or public posting with details on how to participate. You will likely have to work with a firm associated with the IPO to purchase shares, but should be able to transfer them to your own brokerage account afterward.

I have not seen details yet about how to buy in.

I am apprehensive about this information being timely and clear due to Rivian's propensity for terrible communications.
 
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