IPO investors flee Blue Apron, Rivian after their outings at the NYSE

I’ve been thinking a lot about the I.P.O. process after spotting this tweet.

Amid all the criticisms of the Tesla IPO, one high-profile company enjoyed a nice gain: Rivian Motors. The Michigan startup, founded just three years ago, not only faired well in its I.P.O., it also landed a cool $480 million in venture capital funding after its first stock sale.

Venture capital investors were showered with data after Rivian closed its $410 million initial public offering on March 8 at $31 a share, which was up 46% on its IPO price. The company’s stock spiked more than 20% on the first day of trading.

“There was so much excitement about a 2,000 horsepower truck. It’s a big deal,” said Richard Cooper, CEO of venture capital firm New Venture Partners, which helped launch Rivian’s subsidiary Canvoy, which builds electric shipping containers. “This was an I.P.O. with very little buzz.”

Jobs Revival: Some CEOs Can’t Sell This ‘Un-Hindered’ Growth Message

Report: IBM Is Setting Up Program To ‘Start With 1 Business’ And Work Its Way Up

Rivian’s new assets, said Cooper, will help the company more than double its size in five years by developing a product that will transform the trucking industry.

While Rivian’s boat was in port, though, other IPOs stumbled: Shares of meal-kit company Blue Apron tumbled, as did those of messaging app Kik, which was valued at a healthy $1 billion at the height of its IPO hype last year. Social Security Administration Chief Sequestration Lid Talks Debt Ceiling, China Trade Talks

The market swings stung Blue Apron CEO Matt Salzberg, who said in an email to employees that the company just moved past an “uncharted waters” period. Blue Apron listed on the New York Stock Exchange in June 2017 with an IPO price of $10 a share. It was priced higher than many expected, including former General Electric CEO Jeff Immelt. In an email that Salzberg sent to employees on Friday, Blue Apron’s valuation is now $1.6 billion, down from a peak of $3.3 billion.

It’s not uncommon for IPO investors to mark down IPOs within a few months. But one thing that doesn’t typically happen is two high-profile IPOs from one company in the same industry hitting the market just after one other. In that scenario, they sometimes collide, reducing liquidity in the small-cap universe and potentially causing a crush on offerings.

Leave a Comment