Electric vehicle startup Rivian lost about $2 billion since the start of last year, according to its IPO filing with the U.S. Securities and Exchange Commission.
Rivian is seen as among the leading electric vehicle startups that can rival Tesla, which sells the most electric vehicles in the U.S. by far. The company plans to trade its shares on the Nasdaq under the symbol RIVN.
But despite a roster of orders, Rivian is struggling to make money in a capital-intensive car market where it built itself from the ground up.
The company lost $1.02 billion last year and another $994 million in the first half of 2021. But, it has years to catch up with its competitor Tesla, which took 18 years to become profitable.
Founded in 2009, Rivian has focused on trucks and SUVs, a large segment of the American car market, and expanded into last-mile commercial delivery vans, where it found an ally Amazon and financial backer.
Potential customers have ordered 48,390 of its R1T pickup truck and R1S SUV, according to the filing. The EV pickup trucks have rolled off the production lines in Normal, Illinois and deliveries have begun. The SUVs are expected to be delivered later this year.
"We do not expect to be profitable for the foreseeable future as we invest in our business, build capacity and ramp up operations," Rivian said in the filing, "and we cannot assure you that we will ever achieve or be able to maintain profitability in the future."
Rivian expects a "significant portion" of its revenue will come from Amazon, which has invested over $1.8 billion in the company, according to the filing.
In 2019, it reached an agreement with Amazon to design, develop, manufacture and supply electric last-mile delivery vans. Amazon ordered 100,000 vans by 2030, with the first 10,000 expected to be delivered this year. Amazon will have exclusive rights to the delivery vans for four years after its first order is received and it has right of first refusal to buy the vans two years after that.
Amazon's logistics unit, however, has the right to decide how many vans it will purchase from Rivian, which may be fewer than expected, the filing shows. It can also work with other companies to develop or purchase vehicles.
The EV market is attracting lots of attention as major auto manufacturers, like General Motors and Ford, are adding dozens of EVs to their lineups, while EV startups are hoping to outrival the legacy car companies.
Lawmakers are also imposing rules to help spur the growth of the EV market in the face of global climate change.
It has raised $10.5 billion from investors like Amazon and Ford, built a factory in Illinois and employs about 8,000 people globally.
The Irvine-based company's public offering was imminent as it announced in late August it had filed a draft S-1 with the SEC. At the time, Bloomberg reported it was seeking an $80 billion valuation.
In the public filing, the startup listed the size of the offering at $100 million, a placeholder that is expected to change once the terms of the share sale are decided.
"I hope you'll join us in our journey to help drive the future of transportation," Founder and CEO Robert J. Scaringe wrote in a letter to prospective investors and Rivian owners.
The offering is being led by Morgan Stanley, Goldman Sachs Group and JPMorgan Chase & Co.
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The U.S. Securities and Exchange Commission has launched an investigation into video game publishing giant Activision Blizzard, which is engulfed in allegations that company executives ignored reports of sexual misconduct and discrimination against women employees.
The Santa Monica-based company on Monday confirmed the probe and said it was cooperating with the federal agency.
"The U.S. Securities and Exchange Commission is conducting an investigation concerning the company's disclosures regarding employment matters and related issues, and has issued subpoenas to the company and several current and former employees that seek information related to this," a company spokesperson said in a statement.
An SEC spokesperson declined to comment.
The Wall Street Journal reported the investigation will include how the company handled employees' allegations of sexual misconduct and workplace discrimination, citing documents and people familiar with the matter.
The maker of World of Warcraft and Candy Crush was sued by the California Department of Fair Employment and Housing in July. The lawsuit said the company fostered a "frat boy" culture where women employees were subjected to constant sexual harassment, lower pay and retaliation.
WSJ reported the documents the SEC has subpoenaed include personnel files of six former employees, separation agreements reached this year with staffers and Chief Executive Bobby Kotick's communications with other senior executives regarding complaints of sexual harassment or discrimination.
The news organization reported the SEC is looking to discern whether Activision executives properly disclosed allegations of harassment and gender compensation disparities, and whether any of that information should have been shared with investors.
Activision initially said the California lawsuit used distorted and false descriptions of Blizzard's past. Hundreds of employees staged a walkout, calling for a change in the company's culture. Kotick issued an apology ahead of the protest saying the company's initial response was "tone deaf."
The Communications Workers of America filed charges last week with the National Labor Relations Board against Activision, alleging the company used coercive tactics to prevent its employees from organizing.
Days after the California lawsuit was filed, Blizzard president J. Allen Brack stepped down and Jen Oneal and Mike Ybarra replaced him as co-leaders of the company.
While Kotick has stayed at the helm of the company, Activision hired Julie Hodges, a Walt Disney executive, as chief people officer and Sandeep Dube, a Delta Air Lines executive, as chief commercial officer.
On Twitter, a prominent investor, Ross Gerber, called for Kotick to leave the company.
"We have to seriously reconsider our position in $ATVI - Bobby Kotick must go," Gerber, president and CEO of Santa Monica-based wealth and investment management firm Gerber Kawasaki, tweeted.Despite the lawsuits, Activision Blizzard last month beat revenue expectations generating $1.92 billion, slightly down from the company's banner 2020 second quarter, but surpassing analysts expectations of about $1.89 billion.
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Hedge-fund billionaire investor Bill Ackman withdrew his plan to acquire a stake in Universal Music Group via his SPAC, expressing doubts the SEC would approve the deal.
Ackman told shareholders in a letter on Monday that he did not think the SPAC "would be able to consummate the transaction" after the SEC had questioned the legality of the arrangement.
Having launched the largest SPAC ever last summer in hopes of acquiring a "mature unicorn," Ackman announced in June that it would be paying $4 billion for a 10% share of UMG, the world's largest record label by market share, whose roster includes Kanye West, Lady Gaga and Taylor Swift.
It was an unconventional twist on the SPAC, which has been subject to increasing regulatory scrutiny since becoming a hot Wall Street trend.
Shareholders in Pershing Square Tontine Holdings, Ackman's SPAC, would have gotten a slice of UMG along with rights to purchase shares of a future acquisition that Ackman's vehicle would make with its leftover cash. Ackman would have had a longer leash for making that next deal, ostensibly having fulfilled his SPAC's obligation to acquire a company within two years.
Instead, Tontine remains on the hunt. Unless its shareholders approve an extension, it has 18 months to find a new company.
"In light of our recent experience, our next business combination will be structured as a conventional SPAC merger," Ackman wrote.
The regulators followed in the footsteps of the many Tontine investors who didn't like the look of the deal. By Monday, Tontine's share price had fallen 18% since the UMG arrangement was announced.
"We underestimated the reaction that some of our shareholders would have to the transaction's complexity and structure," Ackman wrote.
Ackman added that Pershing Square, his hedge fund, still intends to take a long-term position in UMG, which is set to go public on the Amsterdam stock exchange later this year.