On November 10, 2021, Rivian electric trucks can be seen near Times Square's Nasdaq Marketplace building.
According to the prospectus, Rivian has reserved up to 7% of IPO shares for DSP participants. The two types of eligible investors are: Those who have reserved an R1S or R1T electric vehicle as of Sept. 30 and company officers, directors, and their associates. Deposits are refundable.
Patel cannot currently place any bets on tech. Rivian's Nasdaq debut Wednesday has given it a market capital of $86 billion. This is higher than Ford, and almost equal to General Motors. However, the company projects revenue of zero to $1 million for its third quarter.
Patel, 45, said that he is a long-term investor in these companies. He also invested in Tesla shortly after its 2010 IPO. In July, he bought shares in Lucid Motors. "I am not a meme stock guy. These three things make me feel good about tech.
Patel, a pre-order customer of Rivian, was able to purchase shares in Rivian's IPO Tuesday night under the company's direct share program. Patel purchased 175 shares at the maximum price of $13,650, which was $78 IPO. Patel now owns $17,628 after the stock rose 29% on Wednesday.
Rajiv Patel (an environmental consultant in Austin Texas) put down a $1,000 deposit earlier this year on an electric SUV Rivian. Although he doesn't know when his vehicle (the R1S), will arrive, his down payment is making a significant difference.
Similar moves were made by Uber, Airbnb and Doximity which all set aside shares from their offerings for drivers, hosts and doctors. Rivian's DSP is unique because the company has no customers, despite having a backlog exceeding 55,400 orders as of Oct. 31.
If the DSP had all of its shares available, then participants collectively invested $835 million in Rivian's stock. These shares were worth close to $1.08 trillion as of Wednesday's closing, which is a paper gain equivalent to around $245 million.
Joshua White, a Vanderbilt University finance professor, said that it is a great deal because hot IPO stocks almost always experience a first day pop and retail investors often get shut out. DSP investors are able to sell their shares immediately if they wish, as they don't have to wait for the post-IPO lockup period.
White, who was previously an economist at the Securities and Exchange Commission, said that customers will get a sweetheart deal if they sign up. It's not a product. It's a way for customers to build goodwill and lock in the returns.
Patel was sent his first email regarding Rivian's DSP late last month. He was informed that he had to pre-register before Oct. 25. Morgan Stanley, the principal underwriter of the IPO, was running the program.
Patel was able, after the stock had been priced at $78 on Tuesday night, to access his Morgan Stanley account to select the shares he desired, up to 175. He chose the maximum and transferred the money.
Patel stated that, while he is a huge fan of Tesla, the Rivian R1S would be his first electric car. However, he isn't sure when it will arrive. Rivian stated that it will deliver the backlog of vehicles by 2023. Rivian said that the company is currently developing delivery vehicles to Amazon. Amazon ordered 100,000 vehicles by 2030 and 10,000 by the end of next year.
Patel, who is a mother to two children, is happy to wait for the SUV with seven seats. Models X, Y and X each have five seats.
Patel stated that an SUV was more useful for a family with young children than the Y or Z. Patel also made a refundable deposit for a Lucid vehicle. "But I think I'm fully dedicated to Rivian at the moment," Patel stated.
His investments are mainly focused on clean-tech businesses. He admitted, however, that he sold Tesla shares last year and missed the 2021 rally.
Patel stated, "I had to purchase a house." "But Austin's housing market is amazing, so there are no regrets."
WATCH: Rivian makes his debut on the Nadaq today