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By Noor Zainab Hussain and Ben Klayman
(Reuters) -Shares of Rivian Automotive Inc surged as much as 53% in its Nasdaq debut on Wednesday, giving the Amazon-backed electric vehicle maker a market valuation of more than $100 billion after the world's biggest initial public offering this year.
Rivian shares closed at $100.73, marking a nearly 30% jump from its offering price.
That made Rivian the second most valuable U.S. automaker after Tesla Inc, which is worth $1.06 trillion. Despite just having started selling vehicles and having little revenue to report, Rivian ranked ahead of General Motors Co at $86.05 billion, Ford Motor Co at $77.37 billion, and Lucid Group at $65.96 billion.
Rivian also has trouble ramping up production in Illinois as supply-chain constraints have hit automakers globally. Last July, the EV maker said COVID-19 and its impact on suppliers had delayed the launch of vehicles out of Illinois.
Since last year, EV companies have emerged as some of the hottest investments. Including securities such as options and restricted stock units, Rivian's fully diluted valuation exceeded $106 billion at its debut price.
The IPO allowed Rivian to raise about $12 billion to fund growth, and that figure could rise to $13.7 billion if the full over-allotment of shares is exercised. This makes it the biggest U.S. IPO since Alibaba Group Holding Ltd went public in September 2014.
"The transition to a public company (and) the growth in our capital base" enables Rivian to develop "promising products and volume and growth in terms of new segments and new vehicles that we'll be going into," Rivian Chief Executive R.J. Scaringe said in an interview.
Wall Street's biggest institutional investors, including T. Rowe Price and BlackRock, are betting on Rivian to be the next big player in a sector dominated by Tesla Inc amid mounting pressure on automakers in China and Europe to eliminate vehicle emissions.
Amazon.com Inc is Rivian's largest shareholder with a 20% stake.
Rivian's IPO comes against the backdrop of the United Nations Climate Summit, where automakers, airlines and governments unveiled a raft of pledges to cut greenhouse gas emissions from global transport.
GM CEO Mary Barra on Wednesday said Rivian's IPO only showed how undervalued her company is.
"What it highlights to me is the huge opportunity," she said at a New York Times event. "General Motors is so undervalued."
EXPANSION PLANS
Rivian has been investing heavily to boost production, doubling down on its upscale all-electric R1T pickup truck launched in September. It plans to follow that with an SUV and delivery van, hitting some of the hottest segments in the market.