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tv   Bloomberg Markets  Bloomberg  November 10, 2021 1:00pm-2:00pm EST

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7:00 p.m., welcome to "bloomberg markets." price pressures run hot. inflation posts its biggest annual gain in 30 years. u.s. stocks drop after the cpi report and bond yields rise. we will bring your reaction and talk about what is going on in this economy with joe saluzzi. one of the biggest ipo's in history, certainly the biggest this year, electric vehicle maker rivian, its trading debut is today after raising $11.9 billion in its ipo. we are expecting a big, big pop at the open. we will speak to kodiak robotics ceo and cofounder don burnette
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about how self driving trucks could help solve the supply chain crisis. let's take a quick check of what is going on in markets. we saw the s&p bouncing back and forth between gains and losses. let's take a look, get rid of this board and let's look at the shares. they were indicated to open at $120. that is even though they went out at $78. i see $105, $106. $107. we are looking at rivian trading about 45% up from where it was. this is a look at the market cap. $91.8 billion. that is a lot for a company that is only sold 180 cars. they have orders for tens of
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thousands more vehicles. if an amazon deal is increased, they could be looking at hundreds of thousands of orders. let's get over to ed, he spoke with the ceo of rivian earlier. now we see the live trade. in terms of the price, $108.50 is what i'm seeing. ed: it is bouncing around. there were some raised eyebrows and we got the price to opennet $120 a share. even at the $92 billion market cap, it makes rivian one of the largest in the world. that valuation climbs well above 100 million. visibility on the financials, sales growth, when will they achieve a profit?
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it seems distant. matt: i want to bring in joe saluzzi. we had you slated to talk about other market issues. what you think about this ipo going off that $108 when the shares come through? joe: i don't know anything about the company, but it is enough for the investors. it is always a balancing act on wall street. i don't think it has ever been figured out. that's what investment bankers get paid a lot of money. matt: i think opinions have changed over time. when i first started working at tucker anthony in the 1990's, you wanted to see a big pop. that was part of the ipo. it got everybody rallied. she has her finger on the pulse of investment banks.
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>> this last time morgan stanley saw an ipo this big. whether or not you like the ipo pop, rivian raise more money than expected. they have not left a lot of money on the table. the thing i keep saying is wall street is on rivian's side and a lot of ways. sofi, this is the first ipo that sofi has on its platform. a pretty landmark day as far as ipo's go. matt: a couple other investors in rivian, the ford motor company and amazon, which has an order in for number of trucks.
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this will be a big source of revenue, right? ed: we put a story out last month that it is largely based on the amazon effect. when you are back by the world's largest player, it lends credibility. a lot of people did the basic math and try to quantify what that 100,000 was worth. it is probably worth $5 billion in revenue. according to sources, there is something in the contract around recurring avenue -- recurring revenue. it was called an initial order. i have not seen that language anywhere. he makes it seem as if amazon can expand the order. it will take them years to build anything. matt: demand will outstretched
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supply for a long time. shenali: this is an amazing statistic. one of the biggest ipo's with rivian was general motors. matt: $86 million. ford is worthless the now. volkswagen is worth a little bit more, $141 billion. the interesting thing to me is not the legacy carmakers. we can sit down and do with the math. why is rivian not trading for $100 billion? why is tesla not trading for $1 trillion? >> it is the same problem. matt: there is so much liquidity out there. joe: the market price is the market price.
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who are we to argue? i think ed has done some tremendous work. he has made a really good point about production and other things. who knows going forward. if the market says it is 108, it is 108. matt: joe saluzzi is here. shenali is here. abigail doolittle has an update. abigail: this is super exciting with the shares of rivian up more than 40%. when this stock was first priced, it priced at $62, it increased to $76, and now we are looking at a market cap valuation of $110 billion -- $91
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billion. it is incredible. there is so much enthusiasm for the future of these ev trucks. only 200 have been delivered so far. by the end of the year, 1200. that is more than $100 million per vehicle by the end of the year. it is all about the future. in terms of the ipo, it is similar to what we saw for -- in september, the stock was up 56%. bumble was up 60%. airbnb at more than one her percent. tesla in 2010, its first day, up 20%. it went off at $3.40 and closed at $4.78. rivian is hot, hot, hot. matt: and big, big, big.
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i know a lot of people who put in orders for these trucks. electric vehicle pickup truck has been something everyone has wanted to bring out as quickly as possible. so far, nobody has. ford has to f150 lightning, it is not coming out until next year. correct me if i'm wrong, rivian is the first to market here. gm has the hummer coming out. this is the first ev pickup truck that has come out. as someone who studies cars closely, the pickup truck is very important in the united states of america. ed: it is in the data. 75% or more of new passenger vehicles bought in north america are in the light truck category. pickup trucks, suvs.
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there is a concern on wall street when it comes to rivian. there is a note ahead of the ipo, it is believed rivian blevins natural ceiling of 400,000 a year for this product. why? it costs $70,000. when you look at what gm and ford planted it would electrify silverado and the f-150 lightning. they will have base models at $40,000? how many people out there are going to spend $70,000-plus on a car? the median income household is not spending that on a vehicle so there is concern. in the distant future, they thought about that. they want to expand manufacturing into other markets so they can make these other mass market models and use the same underlying technology. matt: let me stick with this for one moment. this is the r1t pickup truck that rivian is coming out with.
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it looks like a fantastic vehicle. there is a gear tunnel. a hole behind each seat. ed: what would you put in there? matt: they will be selling certain pieces of gear like a camp stove that goes in there. there is one that looks more like an suv, a tahoe, suburban, what have you. they will have trouble getting any of these vehicles to market because they cannot get enough chips. ed: one thing sources have reminded me over the course of 2021, this does not just apply to rivian, but other startups out there, these are guys who will have to build in low-volume production. they cannot compete with a general motors and afford, who can go to their supply chain, where they have big buying power
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read volume and say, i need these chips now. they are low down in the pecking order. rivian is at the mercy of the supply chain. matt: they have done fairly well with the ipo. as shenali pointed out, there was another big ipo on the nasdaq years ago, facebook, that was a disaster. facebook dropped at one point down to $19 a share because the ipo was handled so poorly, or because there were technical problems. this has gone up but a lot, priced at $78, we are looking at it trading for $117. has the nasdaq handle this? i notice it still takes a lot longer for these things to open them when i was a kid. joe: be patient with them.
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they are doing the right thing to wait to see that they get them right. we do not want another facebook, another failure. let them open. i think it is fine. they have done ok with the ipo's. google was an option. -- google was an auction. matt: that was a new thing and i had a full head of hair, which was a long time ago. when founders and investors leave this much money on the table, the other ones look attractive. shenali: that is what the direct listing model has become attractive to companies. not all of them have been so smooth. think about coinbase. morgan stanley at a stronghold of three of the top six ipo's on the u.s. exchange. that is a very big moment.
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morgan stanley, jp morgan and morgan sachs all on this ipo together. it is rare to have three giants on an ipo. if i look back at the last six ipo's of this scale, you do not have all three together like this. it is an amazing, rare story where you have massive players. matt: i just pulled up the league table, goldman sachs is comfortably at the top with 20% of the market share. jp morgan in second place, morgan stanley in third. i would love to see a lead table for exchanges. is there a difference between doing an ipo at the nasdaq compared to doing a knife yell at the new york stock exchange? -- doing an ipo at the new york stock exchange question mark joe: we are trading aftermarket.
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you are trading and nasdaq stock similar to a new york stock earlier in the day. even now, it used to be the new york stock exchange was two letters. they are all mixed up now. to me, they have -- matt: this ipo continues, or the trade continues to rise in price. they are now worth 53% more than they were. do you think rj is bummed out he left more money on the table. he could have gone to market for $16 billion instead of the $12 billion that he got. ed: we reported on this consistently. sources paint a picture to a prudent guy who is careful and saw mistakes made by legacy auto and literally said to his
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investors and employees that we are not going to do that. they raised a lot of private capital, $10.5 billion. they are in a strong, healthy financial position. i do not cover ipo's. traditionally another reason is the publicity. this kind of credibility of being a great american company. i get the sense -- and then there is the political context. they are going to manufacture these vehicles at a time when the administration is doing its best to plow billions of dollars into the market they want to sell them into? matt: what did that make them? indiana? ed: illinois. matt: i get that wrong every time. i assume rj will be looking to put a plant in texas any day now, a plant in germany any day now.
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where will they make these trucks? the need more capacity. ed: they were looking closely at the u.k., outside of the e.u. the texas deal is progressing. his issue was supply chain. they are looking supply chain first in these markets. if we have time, let's quickly listen to what he had to say about supply chain issues. rj: the biggest problem we have across many industries is to health of the supply chain. if you think about building a vehicle like this, there is around thousands of parts the come from suppliers. this is one of the situations where 99.5% is not good enough. ed: he must wake up in the middle of the night and think about semi conductors and where he will get his next thousand workers. matt: great to get that
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interview from you. thank you so much for joining us, ed, out of san francisco. shenali, are wall street reporter, covering this all day with me. we did not get to talk about crypto, market structure, i did not even get your forecast for the s&p 500. we will have you back on in studio. abigail doolittle breaking down the action. wall-to-wall coverage of rivian, right now at $114.50. it went to market at $78. a quick look at the 30 year, those bonds drawing 1.94. we always like to highlight these bond auctions ever since there was an exciting one five or six months ago. we keep waiting for that to happen again.
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we will still keep you updated. this is bloomberg. ♪
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matt: this is "bloomberg markets ." in matt miller. the supply chain crisis has many investors looking with growing interest. kodiak robotics is a self-driving trucking company. it announced it has raised millions of dollars in a fundraising round for a total of $165 million raised to date. joining us now is don burnette. we were talking about rivian. they have their ipo out-of-the-way. it looks like it has been successful. they also have incredible supply chain issues.
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they will hold them back for years from making as much revenue as they potentially could. how will kodiak robotics help a company like that? don: great to be here. we have all felt the impacts of the supply chain crisis over the last few months. while there are many causes of this crisis, the reality is america simply does not have enough truck drivers. the american trucking association estimated there is a shortage of approximately 80,000 drivers. that could reach a hundred 60,000 by 2023. many of the drivers are stuck at clogged ports. autonomous technology, specifically long-haul trucking technology, has the ability to increase the efficiency of the overall supply chain. we can move goods twice as fast
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as traditional human driven trucks can. autonomous trucks have the capacity to benefit society by reducing the supply chain issues we are facing today. matt: i would assume also far fewer accidents. some of the problems with trucking, i have looked into this, i felt it career, it is very difficult to get your license, you have to gain experience before you can become a long-haul trucker and make good money. it is not easy to drive those big rigs. if you have an accident, it is a problem for everyone around you. how soon can you come to market with your product? don: trucking is a dangerous job. fewer young people want to do the work. there is a significant gap
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compared to even a generation ago. this technology has made incredible strides over the last several years for companies like kodiak and others. we will be able to put driverless vehicles out on u.s. highways in the next several years. we have already demonstrated the capabilities of our technology to drive hundreds of miles at a time without safety drivers having to touch the system in any way, shape or form. the technology is capable today, better than most people understand. we will be able to get to a point when we can actually pull the driver out in the next several years. matt: how do you put this technology to work in existing rigs? or do you need volvo, tesla to build you special control units in the trucks? don: we have been working very closely with existing oem partners and suppliers. people who make steering columns, power systems to make sure we are integrating
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technology in automotive grade and a safe way. we have been working on this for many years. there are a lot of steps that still need to be overcome but we are working with those partners to do that. at kodiak, we are building our technology to be platform act on stick. it will work on many different supplier platforms. -- platform to be agnostic. we are working with industry partners as a collective effort to bring technology to the market. matt: you can operate in a peterbilt, will you be able to operate in a tesla big rig? don: tesla is usually locked down. i have not had the opportunity to get my hands on one of the tesla semis.
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it remains to be seen if our technology can integrate with tesla. a lot of manufacturers out there building fantastic fronts and we are working with those to bring the technology to the market. matt: thank you so much for joining us. kodiak robotics ceo and cofounder don burnette talking about self-driving truck technology. disney reports earnings after the bell. we will have a preview. this is bloomberg. ♪
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mark: i am mark crumpton with bloomberg's first word news. the united states and european union are preparing to penalize
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belarus for orchestrating what they call a hybrid attack at the belarusian-poland mortar. -- border. >> at the beginning of next week, -- against belarus. the united states has prepared sanctions that will go into effect at the beginning of december. mark: belarus has channeled thousands of migrants to the border. u.s. secretary of state anthony blinken said allied nations are prepared to take action in china uses force against taiwan. speaking at a conference today, the secretary would not say whether the biden administration would be prepared to use the
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u.s. military in such a conflict. china has ramped up military gear taiwan. president xi could be preparing for an invasion in coming years. the biden administration is rushing thousands of johnson & johnson vaccines into combat zones around the world. it was previously only available through government programs. the ptosis will help protect humanitarian and frontline workers worldwide. quarterback aaron rodgers of the green bay packers is being hit with fines for violating covid part the green bay packers were fined $300,000 while aaron rodgers was fined nearly $15,000. violations included the three-time m.v.p. not wearing a mask at press conferences and
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the team not reporting a halloween party aaron rodgers attended. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. >> i am amanda lang. welcome to "bloomberg markets." matt: i am matt miller. here are the top stories we are following. ev maker rivian goes public after historic ipo reaching a more than $100 billion market cap. inflation surges -- signaling
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the fed might have to move quicker than anticipated. another strong quarter, shares rise. we will speak to the ceo on the company's position. amanda: we are watching stocks close to session lows. the cpi data is the culprit as we see averages way down. the 10 year yield, a big move at 1.55. very surprising headlines. you can see although it is a broad-based, there are pockets of strength. the biggest declines are in energy and tech. some health care doing very well. mastercard is rising.
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there are some believers in this market. tesla getting a bit of a boost after it briefly dipped below $1 trillion in market value. the eye-catching number is inflation. the cpi print posing the biggest annual gain since 1990. we have been talking a lot about the fed's level about this inflation number and whether or not it is transitory and what transitory means. one thing i am looking closely at, research from bridgewater, can we really call this a supply-side driven number, or is it actually demand driven? in that case it would paint a different picture about how much worse it might get. matt: it is definitely demand driven or supply constrained. supply is not driving it, it is lack there of that is the problem. it is more that than the demand
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side. there is not much the fed can do about it. even if they want to raise rates to kill demand, that is not good for the economy. when the surgeon says the surgery was a success but the patient is dead, you do not want that. there is not much the fed can do to ease supply constraints and they do not want pullback on demand. amanda: at some point we might have to see that. we have yet to see a full return to services demand. the data looks scary. at some point, the fed will have to look more closely at this than they have. matt: the 1970's was a great decade for classic rock. time for our stock of the hour. it has been a long road back
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from walt disney. revenues are expected to be the best in seven quarters when earnings are released. >> really good mixture for disney. shares up .4%. a lot of this has to do with big festivals. they have the tourism exposure. people going to disneyland. on the others, they are really reaping the benefits of business models. the business model will be the key focus. disney studios back in its top spot, beating out competitors like warner bros.. the 2022 pipeline will be in focus after production delays. let's look at those streaming subscribers.
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you are seeing them pretty high. the deceleration in growth driven by latin america and a partnership with hot star. amanda: thank you. we are keeping our eyes on shares of doordash hitting a record high after the company announced a $8 billion deal to acquire a startup. bloomberg's emily chang spoke to the ceo of doordash. >> i am super excited about the partnership. for us, it represents our long-term investment in building a global business. we see three amazing things coming together. one is a team that shares our vision for transforming commerce. they share the way we operate
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and competing on building superior products. caring about taking every ounce of inefficiency out of the system and building something for all stakeholders. second, a business with an incredible runway for growth. they are at $2.5 billion of value -- economics largely because of supreme retention. this business will scale for a long time on its own. the final thing is, this partnership really gives us the intentional focus and accelerates our ability to operate across multiple geographies in a hydra mobile -- hyper mobile process. emily: looking into the future, how big of a piece of the doordash pie is nonfood delivery?
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>> the goal was to transform all delivery. make life in cities better. bringing every physical business, whether it is the local butcher shop, grow sure, flower shop, cosmetic stores, restaurants, bring all of that online. that really fits very well with doordash, transforming physical businesses and help them compete. the way we do that is by building the doordash app and by building the largest local commerce platform. we are giving merchants the same tools we've built for ourselves. i think the increasing part of the portfolio will come out of restaurants. as you saw in the third quarter results we announced yesterday, 12% of our monthly active users are shopping outside of the restaurants category, that was
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up from single-digit percentages. emily: there are supply-chain shortages are pretty much everything around the world, including food. are you seeing prices rise on menus? how is that impacting doordash? >> one thing playing out in the macroeconomy, while governments around the world absolutely made the right decisions to inject money into the system and really prevent a global recession in the middle of a global pandemic, some of the consequences are playing out. it was not possible to predict all of the consequences that would happen from the actions, but we are seeing a rise in prices. that is happening with supply chains impacting grocery stores, impacting convenience stores. and other types of retailers. we are seeing some of that happen in the restaurant space. labor is tight. labor costs are rising.
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we are seeing some of those inflationary pressures. i think what i am hopeful and optimistic about, governments, alongside with business, will work and address these issues. we did the right thing at preventing a global recession. now we have to do the right thing and confront some of these consequences to mitigate the trade-offs. matt: that was the doordash ceo talking about the company making an acquisition to buy -- $8.1 billion. coming up, shares of akamai rising after third-quarter results meet expectations lastly. we will talk to the ceo, thomas layton, about his outlook. this is bloomberg. ♪
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matt: this is "bloomberg markets ." i am matt miller, along with amanda lang. estimates for revenue and earnings were beat. security, like keeping bad guys out. joining us is tom leighton. you basically help businesses stave off ransomware attack spent how important is that part of your business? dr. leighton: we recently acquired a company, which we
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believe has the best solution for stopping ransomware. technology is based on something called micro-segmentation. that is what you need to stop the ransomware from spreading within an enterprise. want to try to keep the malware out, but it is way too easy for the bad guys to get it in somehow. the key is to stop the spread and then you limit the damage. amanda: in one of your state of the internet reports, you identified that these attacks -- i think you were talking about attacks on api but i think it is true across the cybersecurity world -- are underreported. businesses do not like to say they have been the subject of an attack. how can you help change that? dr. leighton: it helps to get the word out. government was getting involved. that are passed -- new laws that
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are passed will be helpful. sometimes it takes them months to realize they have been penetrated. companies know they can take corrective action. matt: what kind of growth do you expect in this area? it is something we have been talking about for years, but it has all the sudden reared its ugly head during the pandemic. dr. leighton: our security business as a whole was at 26% year-over-year in the third quarter. we are now over $1.3 billion per year. the segment about securing enterprise and the issues is growing at triple digits. there is an enormous potential for future growth. the good news is now there is technology that can really help. amanda: just in terms of what
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you are seeing from your customers, obviously these are important themes, are you seeing growth built into their own projections? this is not based on their own revenue growth, it is based on a need in the marketplace getting worse as we move along? dr. leighton: you are absolutely right. it is based on needs. denial of service attacks. in the last year, we have seen a lot of attacks. -- account hijacking, account takeover. most logins to customer sites are fraudulent. we have technology to identify that. with enterprise security and ransomware, the market is enormous.
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it is a matter of getting the solutions out there and enterprises understanding how to stop it. matt: aside from the cybersecurity business, you have cloud delivery, you have cloud services, the edge platform, how have you whether the supply chain crisis with your server business? dr. leighton: that is a really good question. when the pandemic hit, traffic jumped. it was almost like a doubling overnight. we did a major investment buildout to have the capacity on our platform to keep the internet running. as part of that, we decided to increase our inventory. just in case something else happened. that is benefiting us now. we are fine in terms of the supply. amanda: the other big story and seem we are hearing is labor,
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the ability to get it in the price at which you get it. how have you experience that? dr. leighton: it is a very competitive environment. so far, we are faring well. our attrition rates are up. they are at normal levels. we feel fortunate because we see the environment around us where the attrition rates are much higher than normal. very competitive market. i think it will be for some time to come. amanda: great to have you with us. we appreciate it. dr. leighton: thank you very much. amanda: the ev maker's debut today. stay with us.
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>> we spent years and years
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putting this together. what is so exciting seeing such a diverse group of people with diverse backgrounds and interests coming together for these products. it was quite emotional seeing so many passionate faces. it was really powerful. amanda: this is "bloomberg markets." i am amanda lang with matt miller. that was rivian's ceo speaking with ed ludlow. rivian is successful today in its ipo. a massive increase in its valuation today. ed: the shares have pulled back sharply in the last five minutes to $101 per share. no matter how you slice it, the valuation is $100 billion-plus.
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in one month, rivian will be one of the biggest publicly traded automakers globally. there is a debate on social media about what is driving the valuation and psychology of investors because we will not know for some time what the financial outlook of this company is. they are so supply constrained with the number of vehicles they can build. more than double the buy orders that tesla has. there is a lot going on here. matt: ed, there are a lot of people who do not know how to pronounce rj scaringe's name today, that will change.
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he has made a lot of money. he has been doing this for over a decade. ed: he started the early version of rivian into thousand nine. he got some money from his dad who mortgaged the family's home. he holds a doctorate from m.i.t. he was in stealth mode. he went on stage and there it was. an electric pickup. the thing the market has been calling for. people were scratching their heads thinking, how did we not hear about this startup? they raised $10.5 billion from big-name private investors. they have a lot of cash at their disposal. they have a lot of work to do. the vehicles they are building, hardly any meaningful production, and it will be a long time before they hit big volumes, the likes of which we
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see from tesla. amanda: this is not get a company that can say, look at our revenue? look at our profit. they have neither. ed: it has a deadline to deliver 10,000 two amazon by next year. there are supply chain issues. that is the problem. amanda: ed ludlow, great reporting. that does it for us today. for matt miller, i am amanda lang. stay with us. plenty more ahead ♪ . ♪ ♪
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>> for the most part, our supply . mark: the white house says 900,000 children ages five to 11
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will have received their first dose in their first week of eligibility. the cdc says 2 million american kids ages five to 11 have had covid over the past year, but only 66 have died. the biden administration is brushing doses of the johnson & johnson vaccine into conflict zones around the world previously, it was only available through official government programs. these doses will now help protect humanitarian and frontline workers worldwide in areas hit by conflict or natural disaster. almost a quarter of financial services firms are planning to cut their workforce in new york city in the next five years. a survey finds nearly 13% of employers in nyc expect to reduce their workforces

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