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XFive Things You Should Know About Rivian’s Massive IPO
Harri is dot.LA's senior finance reporter. She previously worked for Gizmodo, Fast Company, VentureBeat and Flipboard. Find her on Twitter and send tips on L.A. startups and venture capital to harrison@dot.la.
Rivian, the electric vehicle maker backed by Amazon and Ford, raised nearly $12 billion in its closely watched IPO on Wednesday. Trading is slated to kick off shortly, and shares have been priced at $78, above the earlier $72-to-$74 range set by the company.
With hardly any revenue, big losses, and a waiting list that stretches to the end of 2023, here are five things you should know about the Irvine-based company, as its implied valuation tops $77 billion.
Rivian's Future Is Linked to Amazon, For Now
Amazon owns nearly a quarter of Rivian and is its biggest investor, so the conglomerate stood to gain the most from the blockbuster IPO.
Amazon is also Rivian's largest known customer. Rivian's plan to deliver 10,000 electric delivery vans to Amazon by the end of 2022 is a driving force behind the young company's huge valuation. But Rivian's dependence on Amazon could lessen by 2023, when it says it will start selling its electric vans to other firms.
In the meantime, those vans are a key element of Amazon's decarbonization efforts. Amazon has promised to become net carbon neutral by 2040.
Ford Nearly Missed Out
Ford had to jostle rival GM out of the way to snap up its 12% stake in Rivian, the Wall Street Journal reports.
Troubled by Tesla's rise, Ford sought to invest in the young EV company, but a poor earnings report — and competing interest from GM — almost derailed its plans. Talks between the automakers reportedly culminated in Rivian CEO RJ Scaringe dashing out of Ford's private jet into an SUV to avoid being seen by GM executives while talks were still ongoing.
Rivian's "Toxic Bro Culture"
Former Rivian VP of Sales and Marketing Laura Schwab is suing the company for gender discrimination. In a post on Medium, Schwab accused Rivian of firing her for speaking out to human resources.
"Rivian publicly boasts about its culture, so it was a crushing blow when I joined the company and almost immediately experienced a toxic bro culture that marginalizes women and contributes to the company making mistakes," Schwab wrote.
Rivian declined an earlier request for comment on the matter.
Big Losses
The electric vehicle maker recently said it expected to report net losses as high as $1.28 billion for its third quarter. While sharing preliminary results, the company blamed its heightened losses on "significant labor and overhead costs for our manufacturing facility in Normal, Illinois."
And Rivian isn't yet making up for it with booming sales. At the high end, Rivian estimated it brought in $1 million in revenue for the same quarter.
A Long Waiting List
Shoppers in the market for a Rivian electric truck or SUV may have to wait a couple years. The company repeatedly delayed the release of its first vehicle, and its backlog of about 55,400 pre-orders now stretches to the end of 2023, according to a regulatory filing.
Rivian is reportedly producing its R1T trucks, which start at $67,500 with an estimated 314-mile range, at a "trickle," per Bloomberg. And Rivian's R1S SUVs, which start at $70,000 with an estimated 316-mile range, do not appear to be in production quite yet.
This post was updated on November 10 with the latest info on Rivian's IPO.
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Harri is dot.LA's senior finance reporter. She previously worked for Gizmodo, Fast Company, VentureBeat and Flipboard. Find her on Twitter and send tips on L.A. startups and venture capital to harrison@dot.la.
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Snap Says It Will Miss Earnings Targets, Slow Down Hiring
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Snap warned on Monday that it will likely report lower-than-expected revenues and profits this quarter—a revelation that sent the social media firm’s stock price plunging by 30%.
“The macroeconomic environment has deteriorated further and faster than anticipated,” Snap disclosed in a filing with the Securities and Exchange Commission. “As a result, we believe it is likely that we will report revenue and adjusted EBITDA below the low end of our [second quarter] 2022 guidance range.”
The Santa Monica-based company was already bracing for another challenging quarter due to economic headwinds like inflation and Russia’s invasion of Ukraine, which it said have harmed the digital advertising market. Snap, which generates virtually all of its revenue from ads, is also still grappling with Apple’s decision to restrict how users are tracked on mobile devices.
As a result of the gloomy outlook, Snap is set to slow down on hiring. The company now plans to hire another 500 new employees through the end of this year, compared to the 900 employees who have already accepted offers this year and the 2,000 people it added over the last 12 months, according to The Verge, which cited a memo from Snap CEO Evan Spiegel.
“Our most meaningful gains over the coming months will come as a result of improved productivity from our existing team members,” Spiegel wrote in his note to staff.
Snap’s shares subsequently fell more than 30% in after-hours trading, to $15.71 as of 4:45 p.m. Pacific Time. The company’s stock closed Monday’s trading at $22.47—down 52% since the start of this year and 73% off its 52-week high in September. (Disclosure: Snap is an investor in dot.LA.)
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Halsey Blasts Record Label for ‘Fake Viral’ TikTok Requirement
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
The singer Halsey has claimed that their record label is requiring TikTok momentum before letting them release new music, in comments that draw attention to the video-sharing app’s growing influence over the music industry.
In a TikTok video released Sunday, Halsey claimed the Astralwerks-Capitol label will not allow them to release their latest song until “they can fake a viral moment on TikTok.” Halsey played the song in the background as they said that “basically every artist these days” is stuck waiting for TikTok virality as they plan music releases. In a subsequent series of Tweets, Halsey said that their TikTok video ironically going viral has not yet resulted in a release date, despite the song having been ready for a month.
The response has ranged from people viewing the video as a disingenuous marketing scheme meant to gain sympathy to others expressing support for the musician.
“Our belief in Halsey as a singular and important artist is total and unwavering,” an Astralwerks-Capitol rep told Variety. “We can’t wait for the world to hear their brilliant new music.”
Other musicians have recently expressed similar complaints. Ahead of Adele’s 2021 album, the singer said she shot down her team’s request to share her new music on TikTok. But few in the industry have Adele’s reach, and artists like Florence Welch, Ed Sheeran and FKA Twigs have all taken to TikTok at their labels' behest.
In April, Lizzo released her latest single “About Damn Time” on TikTok with an accompanying dance; the audio has since been used in over 1 million videos on the app, while the song made it to no. 9 on the Billboard Hot 100 chart. Other music artists are using TikTok stars to promote their material, with singer Harry Styles tapping influencer Brittany Broski to take over his social media ahead of his recent concert.
As artists can now grow their audiences on social media without relying on traditional mainstream media, it’s clear that TikTok has disrupted the industry. Take Lil Nas X, who used the app to promote "Old Town Road" and was up for five Grammy awards this year. On occasion, a short singing clip can even lead labels to sign new artists, as was the case with Australian singer Peach PRC.
A viral moment on TikTok can also take an unknown song or music project to new heights. “The Unofficial Bridgerton Musical,” a passion project started on the platform, beat theater legend Andrew Lloyd Webber to take home a Grammy earlier this year. Having bought the rights to Universal Music Group’s catalog and launched a platform that would allow artists to monetize their music uploaded to the app, TikTok is certainly leaning into its industry impact.
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Activision Blizzard Workers Win Union Vote
Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Samson is also a proud member of the Transgender Journalists Association. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him
Workers at Activision Blizzard subsidiary Raven Software won their labor union vote today—a move that certifies the first union at a major video game publisher in the U.S., and one that could potentially transform the Santa Monica-based game developer that Microsoft is paying $69 billion to acquire.
Twenty-two employees at Wisconsin-based Raven voted 19-to-3 in favor of ratifying their Game Workers Alliance union in a National Labor Relations Board-sponsored election on Monday. The Raven workers—who do quality assurance testing for popular Activision titles like “Call of Duty”—formed the Game Workers Alliance in January and proceeded with the vote after Activision refused to voluntarily recognize the union.
The vote marks the first time that employees at a AAA game publisher in the U.S. have successfully unionized their workplace. It could also be a key step toward unionizing the rest of Activision’s 10,000-person workforce—something that Raven labor organizers told dot.LA earlier this year is part of their larger plan.
“We respect and believe in the right of all employees to decide whether or not to support or vote for a union,” Activision spokesperson Talia Ron told dot.LA in an email Monday. “We believe that an important decision that will impact the entire Raven Software studio of roughly 350 people should not be made by 19 Raven employees.”
None of Activision’s major competitors, such as West Los Angeles-based Riot Games, have unionized employees. Across the entire video game industry, only indie studio Vodeo Games has a labor union—one which became the first certified game workers’ union in North America last year.
“This is a huge win for not only the gaming industry but AAA gaming, because this is the first studio you're seeing out of a AAA [publisher] actually unionizing,” labor organizer and former Activision quality assurance tester Jessica Gonazlez told dot.LA.
Pro-union Activision employees have long felt that an organized workplace could provide the muscle they need to address issues that have plagued the company and their industry at large—from long, grueling work hours to sexual harassment and discrimination. “I'm very, very hopeful that this is going to be part of a larger wave of unionizing in the video game industry as a whole,” Gonzalez added.
While Microsoft executives have said that the Seattle tech giant won’t stand in the way of union efforts at Activision, the game developer has taken steps perceived as anti-union among its workers—such as leaving Raven Software employees out of a pay bump for quality assurance testers and proposing contract language that would prevent workers from organizing. Raven workers began organizing after walking off the job in December in protest of Activision’s decision to lay off 12 quality assurance contractors.
In a statement, Sara Steffens, secretary-treasurer for the Communications Workers of America labor union backing Raven’s Game Workers Alliance, said “Activision did everything it could, including breaking the law, to try to prevent the Raven QA workers from forming their union.”
“Quality assurance workers at Raven Software are bringing much-needed change to Activision and to the video game industry,” Steffens said. “At this critical time for the company and its employees, these workers will soon have an enforceable union contract and a voice on the job.”
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Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Samson is also a proud member of the Transgender Journalists Association. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him