Wall Street Breakfast: Start Your Motors!

Start your motors! - The next EV maker to hit the public markets is set to make an electrifying debut today. Rivian Automotive (RIVN) has priced its IPO at $78/share, above an already-elevated range of $72 to $74, raising a whopping $11.9B for the biggest share sale of 2022. With a market capitalization of over $66B, Rivian would be roughly on par with Nio (NIO), but way bigger than Honda (HMC), Ferrari (RACE), Lucid (LCID) and Fisker (FSR). Backdrop: Rivian was founded in 2009 by RJ Scaringe, the same year he finished his doctorate in mechanical engineering at MIT. The EV maker originally set out to make a sports car, but pivoted to electric pickup trucks and SUVs due to their growing popularity among consumers. Over the past two years, the company has burned through cash (about $2B in 1H21 alone) to retool its factory and prepare for large scale production. Rivian hopes to launch three models by year's end, including an electric pickup called the R1T (deliveries began in September), a midsize SUV called the R1S and an electric delivery truck designed and built for Amazon (AMZN). Rivian outlined its ecosystem in advance of the IPO, which includes vehicle technology, the Rivian Cloud, product development, analytics, accessories and services. The ecosystem, which also details plans for a charging network, is described as competitive in comparison to peers. Rivian estimates its total addressable market at $9T, and its serviceable available market at $1T. Go deeper: Tesla (TSLA) is mentioned in the IPO filing by Rivian due to a trade secret lawsuit that is currently underway between the two companies. With Amazon a big backer of Rivian (it has a 22.4% stake), the sometimes edgy battle between Elon Musk and Jeff Bezos will extend to a degree from the space race to the electric vehicle industry. Rivian also wants to skip dealership sales like Tesla, selling directly to consumers and asking for a refundable deposit when people order their vehicles on its website. (54 comments)Should you scoop up some shares? SA authors Victor Dergunov and David Trainer take sides in articles Rivian: Why I Want In On This EV IPO vs. Rivian: Even At A Lowered Valuation, Don't Buy This IPO.

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Top News Start your motors! Shutterstock The next EV maker to hit the public markets is set to make an electrifying debut today. Rivian Automotive (RIVN) has priced its IPO at $78/share, above an already-elevated range of $72 to $74, raising a whopping $11.9B for the biggest share sale of 2022. With a market capitalization of over $66B, Rivian would be roughly on par with Nio (NIO), but way bigger than Honda (HMC), Ferrari (RACE), Lucid (LCID) and Fisker (FSR). Backdrop: Rivian was founded in 2009 by RJ Scaringe, the same year he finished his doctorate in mechanical engineering at MIT. The EV maker originally set out to make a sports car, but pivoted to electric pickup trucks and SUVs due to their growing popularity among consumers. Over the past two years, the company has burned through cash (about $2B in 1H21 alone) to retool its factory and prepare for large scale production. Rivian hopes to launch three models by year's end, including an electric pickup called the R1T (deliveries began in September), a midsize SUV called the R1S and an electric delivery truck designed and built for Amazon (AMZN). Rivian outlined its ecosystem in advance of the IPO, which includes vehicle technology, the Rivian Cloud, product development, analytics, accessories and services. The ecosystem, which also details plans for a charging network, is described as competitive in comparison to peers. Rivian estimates its total addressable market at $9T, and its serviceable available market at $1T. Go deeper: Tesla (TSLA) is mentioned in the IPO filing by Rivian due to a trade secret lawsuit that is currently underway between the two companies. With Amazon a big backer of Rivian (it has a 22.4% stake), the sometimes edgy battle between Elon Musk and Jeff Bezos will extend to a degree from the space race to the electric vehicle industry. Rivian also wants to skip dealership sales like Tesla, selling directly to consumers and asking for a refundable deposit when people order their vehicles on its website. (54 comments) Should you scoop up some shares? SA authors Victor Dergunov and David Trainer take sides in articles Rivian: Why I Want In On This EV IPO vs. Rivian: Even At A Lowered Valuation, Don't Buy This IPO.       Economy Sizzling inflation Get ready for some early action this morning as the consumer price index for October is published at 8:30 a.m. ET. The figure is expected to come in flaming once again, rising 5.8% Y/Y, though some economists even see a 5.9% advance or above, which would be the biggest Y/Y increase since December 1990. While the Fed has maintained that the pickup in inflation will be transitory (how long is that?), the stance has recently shifted with the central now seeing prices staying elevated into next year. Analyst commentary: "There is a risk it could be even higher," Grant Thornton chief economist Diane Swonk declared. "We've got some unusual distortions with used car prices, airfares going up and hotel room rates rising. You could get some surging prices in services, at the same time you had a snapback in used car prices and new car prices also went up because demand went up with the flooding from summer hurricanes." Economists expect core CPI, which excludes food and energy and is the Fed's preferred gauge of inflation, to have risen 4.3% Y/Y. That would be the fifth consecutive month above the 4% level, and if things were to continue heating up, it could prompt the central bank to speed up tapering or hike interest rates sooner than expected. Yesterday, Treasury Secretary and ex-Fed Chair Janet Yellen said policymakers would not allow a repeat of 1970s-level inflation, and attributed the recent price pressures to supply bottlenecks, labor shortages and heavy consumer spending. How is the CPI calculated? The measure uses a "basket of goods" approach that aims to compare costs of various consumer goods and services. These can include transportation, food, rent, haircuts and medical care (80,000 items are included in the report). Each month, data collectors from the Bureau of Labor Statistics call, visit, or check the websites of thousands of retail stores, professional offices and other establishments to assess nationwide price information. Specialists then examine the data for accuracy and make statistical adjustments based on any given item's value. (10 comments)       Sponsored By Northern Trust Are there surprises lurking in your estate plan? Estate plans that fall out of date can lead to unpleasant surprises. Proposed tax changes underscore the importance of revisiting your plan now. Let us stress test your plan to ensure your lifetime, family and philanthropic goals are fulfilled. Test Your Plan Trending Union fight Workers at three Starbucks (NASDAQ:SBUX) stores in and around Buffalo, New York, will begin voting today on whether they want to be represented by Workers United, an affiliate of the Service Employees International Union. Never in the coffee chain's 50-year history has it relied on union workers to serve up its lattes, making the rare unionization drive a big deal. The votes will be counted on Dec. 9, possibly creating a first-ever labor foothold among Starbucks' 9,000 corporate-run stores in the U.S. Thought bubble: While Starbucks has fought off a handful of unionization efforts over the past two decades, this time around the campaign is happening at an unusual moment for the American worker. A tight labor market has given the demographic an outsized influence, while some have even looked to demand greater compensation for the risks they shouldered during the pandemic. In recent weeks, thousands of unionized workers at Deere (NYSE:DE) and Kellogg (NYSE:K) went on strike, while Amazon (NASDAQ:AMZN) warehouse workers in Staten Island are seeking a union election this fall. The pro-union Starbucks workers in Buffalo won a key victory last week when the National Labor Relations Board allowed store-by-store unionization votes at three separate locations. Starbucks appealed the decision, but the vote may proceed even as a review is held at the NLRB (following President Biden's appointments, three of the labor board's five members now have union backgrounds). "It's a much bigger deal than the number of people would suggest," said former NLRB chair and union attorney Wilma Liebman. "Winning is contagious, and it could spread like wildfire [in the broader restaurant industry]." High-profile appearance: Employees interested in unionization say they like Starbucks, but want to secure a say over schedules, wages and how the company deals with harassment from customers. However, the coffee giant feels it has cultivated a progressive brand more than its peers, closing stores to hold racial bias trainings, offering health benefits to part-timers and recently announcing it would implement a $15 minimum wage nationwide. Starbucks even brought in former CEO and Chairman Emeritus Howard Schultz last week to discuss the happenings in Buffalo, where he told workers that "no partner has ever needed to have a representative seek to obtain things we all have as partners at Starbucks, and I am saddened and concerned to hear anyone thinks that is needed now." (2 comments)       M&A DASH wolfs down Wolt Shares of DoorDash (DASH) rose as high as 20% in premarket trading after announcing its biggest acquisition to date: Helsinki-based food delivery startup Wolt. The all-stock deal, worth approximately $8.1B, will not only accelerate DoorDash's international growth, but it will allow the company to specifically expand into the highly competitive European market. Bigger picture: Founded in 2014, Wolt currently has about 4,000 employees, 12M registered customers and runs delivery services and platforms in 23 countries. DoorDash also considered a deal with German food delivery company Gorillas earlier this year, and while those talks fell apart, it is planning to confirm a $400M investment in grocery app Flink as soon as today. Last week, in an effort to expand beyond its traditional food delivery services, DoorDash announced a partnership with Ulta Beauty (ULTA) to provide same-day delivery of beauty products.

"People are going back inside stores, and in-store dining is seeing record highs," DoorDash CEO Tony Xu said after the deal. "And so we are seeing a normalization of growth rates, but I think it's important to put this in context that delivery is here to stay."

Wave of consolidation: Last year, Grubhub agreed to merge with Europe's Just Eat Takeaway.com (GRUB), while Uber Eats (UBER) snatched smaller rival Postmates for $2.7B. (2 comments)

     

Today's Markets

In Asia, Japan -0.6%. Hong Kong +0.7%. China -0.4%. India -0.1%.
In Europe, at midday, London +0.5%. Paris -0.2%. Frankfurt flat.
Futures at 6:20, Dow -0.2%. S&P -0.3. Nasdaq -0.4%. Crude -0.6% at $83.69. Gold -0.2% at $1826.60. Bitcoin -1.4% at $66863.
Ten-year Treasury Yield +3 bps to 1.48%

Today's Economic Calendar

7:00 MBA Mortgage Applications
8:30 Consumer Price Index
8:30 Initial Jobless Claims
10:00 Wholesale Inventories (Preliminary)
10:00 Atlanta Fed's Business Inflation Expectations
10:30 EIA Petroleum Inventories
12:00 PM EIA Natural Gas Inventory
1:00 PM Results of $25B, 30-Year Note Auction
2:00 PM Treasury Statement

Companies reporting earnings today »

What else is happening...

Amid big bull market, U.S. contends with a soaring Misery Index.

Pfizer (NYSE:PFE) asks FDA to expand COVID booster eligibility for all adults.

U.S. government to buy $1B more worth of Merck's (NYSE:MRK) COVID-19 pill.

Coinbase (NASDAQ:COIN) slides after Q3 results reflect declining crypto prices.

Amazon (NASDAQ:AMZN) in talks to settle EU antitrust investigations - Reuters.

Monday.com (NASDAQ:MNDY) hits new high before earnings, up 190% since June IPO.

Royal Caribbean's (NYSE:RCL) long-time CEO Richard Fain to step down.

'Squid Game' creator says Netflix (NASDAQ:NFLX) will bring a second season.

U.S. energy report sees oil market oversupplied by early next year.

Tesla (NASDAQ:TSLA) tanks on insider selling worries; Musk loses $50B in two days.

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