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Sunday, September 25, 2022

Rivian’s stock boom: Irvine EV startups are valued like these name-brand companies

How is an upstart truck maker one of America’s most valuable companies without a product for sale?

Irvine-based Rivian is certainly a gamble, but funding partners like Ford Motor and Amazon believe it will likely become a serious player in the electric truck business. It went public this week, the first time the stock was sold on Wall Street to an enthusiastic reception, giving it a market valuation of $127 billion as of Friday.

If the Billions concept makes your head hurt, consider this: The Rivian is valued roughly the same as the combined market values ​​of the four Asian automakers that have US headquarters in Southern California — Honda, Hyundai, Kia and Mazda.

Or look at it this way: According to Companymarketcap.com, only 68 U.S. public companies are overvalued.

Yes, stock markets do crazy things with wild concepts. Yes, investors have been wrong before. And the market value of a company that is just starting to make its vehicles sounds rich to my blood.

However, when I looked at public companies of comparable stock value, a common theme emerged: They once seemed like a longtime dream.

Without suggesting that Rivian’s “next big thing,” let’s consider a few U.S. businesses whose value is roughly the same as the budding EV truck maker on Friday. And note, most of these brand-name corporations are much older than 12-year-old Rivian.

Raytheon Technologies (market capitalization of $134 billion): This defense contractor began making radio tubes in the 1920s and grew into a major radar manufacturer, manufacturer of the air-to-air Patriot missile, as well as the inventor of the microwave.

Starbucks ($132 billion): Half a century ago, a Seattle coffee roaster began to revolutionize the morning cup of joe’s—viewed as a cheap, low-quality morning drink, all-day, luxury drink with global appeal. was changed to.

Bristol-Myers Squibb ($132 billion): The drug giant’s history dates back to Ed Squibb, a Navy doctor who invented an improved ether in the 1850s. Today, after several acquisitions and disinvestments — including selling Excedrin — it may be best known for its blood thinner, Coumadin.

Airbnb ($132 billion): The house-rental service evolved from a 2007 concept by two young San Francisco young adults who built a “bed and breakfast” business by renting an air mattress in their living rooms.

Boeing ($130 billion): The planner and defense contractor has its roots in Seattle businessman William Boeing’s 1916 idea to grow his woodworking business into the craze-flying machines of the era.

Target ($127 billion): When banker George Dayton’s Minneapolis Church was in need of cash in 1906, he bought and built additional land that would eventually become the Dayton-Hudson Department Store. Six decades later, discounter Target was launched, and the legacy department stores were closed in 2004.

Intuitive Surgical ($127 billion): In 1994, Frederick Moll brought the idea of ​​robotic surgery to his then employer, medical device manufacturer Guidant. When he said no thanks, he quit and eventually his company’s “da Vinci” system became a surgical standard.

Estee Lauder ($125 billion): Creation of New Yorkers Estée and Joseph Lauder after World War II, the cosmetics company grew in value by creating high-end products for both women (Clinique) and men (Aramis).

Charter Communications ($124 billion): In the early 1980s, paying for TV seemed crazy when the major networks provided it for free. Michigan-bred charterers began to gain control of telegraph cities for cable TV. Its history is complex and includes bankruptcy and the eventual acquisition of the giant Time-Warner Cable.

CVS Health ($124 billion): The retailer began as a consumer value store, selling beauty products in Massachusetts in the 1960s. The value theft of today’s CVS comes from a 1996 stock offering that allowed it to take on competitors to buy an insurer (Aetna) and create its national drugstore chain.

American Tower ($124 billion): You probably use their products daily. It is a 1998 spinoff from the CBS entertainment empire that saw an opportunity to purchase older microwave towers, which are used for long-distance phone transmission. It turned real estate into facilities that power cells service.

Amgen ($119 billion): The Thousand Oaks pharmaceutical company – originally Applied Molecular Genetics when it started in 1980 – first used novel manufacturing techniques to boost cancer patient survival rates. It is now better known for its arthritis treatment, Enbrel.

General Electric ($118 billion): Yes, the company was founded in 1892 by inventor Thomas Edison. Its more modern innovations included advancing the “group” concept of owning a wide collection of businesses. That strategy has fallen out of favor, so it plans to split into three separate companies.

Snowflakes ($116 billion): Like Rivian, a young nine-year-old company. This Silicon Valley-bred supplier of “cloud” computing systems had a record-setting stock offering late last year. Recently, it said it was becoming headquarters-less – with key executives operating out of Montana.

Jonathan Lancer is business columnist for Southern California Newsgroup. He can be contacted at [email protected]

World Nation News Desk
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