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Rivian’s R1T.

Courtesy Rivian

Stock in Rivian Automotive isn’t braking for anything right now.

Shares were up again Monday after an epic first week, making the electric truck start-up now the world’s third-most valuable auto maker.

Rivian stock (ticker: RIVN) tacked on another 13% to last week’s roughly 67% gain. The company kicked off trading Tuesday at $78 a share, and the stock closed Friday at almost $130. Monday’s price was hovering around $145.

The

S&P 500
and

Dow Jones Industrial Average
were both flat.

Monday’s gain amounts to almost $15 billion in market value based on a fully diluted share count—more than the market capitalizations of other aspiring electric-vehicle producers


Nikola

(NKLA),


Fisker

(FSR),


Lordstown Motor

(RIDE), and


Workhorse

(WHKS), combined.

Rivian has, very roughly, 890 million common shares outstanding, assuming underwriters exercised their typical option to buy a few more shares after the initial public offering to satisfy strong investor demand. But the basic figure excludes roughly 67 million management stock options with a strike price of less than $12 a share; another roughly 35 million shares that were granted as restricted stock units; and another 20 million shares associated with outstanding warrants and other items.

On a fully diluted basis, the stock count is roughly 1 billion shares, making the fully diluted market cap about $145 billion. Only


Tesla

(TSLA), valued at more than $1 trillion, and


Toyota Motor

(TM), with a $300 billion market cap, are more valuable.


Volkswagen

(VOW3. Germany) comes in fourth with a market cap of about $139 billion.


General Motors

(GM) and


Ford Motor

(F) are worth about $170 billion, combined.

All the cash that Rivian has on hand could be factored into its valuation. Comparing corporate enterprise values—and not market capitalizations—is sometimes helpful. Enterprise value is, essentially, stock market value and debt, net of cash on the balance sheet.

The auto industry, however, tends to be a special case. Most auto makers have large automotive finance units—like banks with a lot of debt. But the finance units have a lot of assets, too, that need to be accounted for, such as the vehicles financed.

Ford is a good example. It has a market capitalization of about $80 billion and total debt of about $146 billion. But that debt, for the most part, is part of Ford Motor Credit Credit—and Ford Motor Credit has almost $130 billion in cash as well as loans outstanding to customers. Including those assets and adjusting for debt and cash held at Ford’s automotive operations, Ford’s enterprise value is a little lower than the market cap.

In the end, it’s easier to compare automotive market capitalizations.

No matter what numbers are used, the Rivian rally is amazing. Where it goes is anyone’s guess. There are no Wall Street estimates to guide investors yet.

Sales in 2023 might approach $10 billion, based on the company’s production plans, which would put the stock at about 15 times sales. Tesla trades for roughly 11 times estimated 2023 sales.

Rivian, of course, is smaller and will be growing faster that Tesla in 2023, but that is one data point investors can use to help value the truck maker before analysts begin writing research reports.

Write to Al Root at [email protected]

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