Stock Takes: Kiwis invest $15m in US electric ute-maker Rivian
Kiwi investors have backed another electric car maker, investing about $15 million in US firm Rivian Automotive since it listed last week on the Nasdaq exchange.
Rivian’s initial public offer raised US$12 billion, making it the largest public offer in America this year and second largest by market capitalisation behind Coinbase.
Its shares were priced at US$78 ($111.18) and doubled in value by Tuesday before dropping back yesterday to close on US$146.07.
By lunchtime yesterday, retail investment platform Sharesies had already placed $7m worth of buy orders from 3400 Kiwi investors. Australian rival Stake said Kiwis had traded $5.7m in Rivian stock in its first week on the market.
Hatch investors also put down $2.1m – more than the $1.9m invested in Rocket Lab during its debut week.
Stake CEO Matt Leibowitz said Kiwis had always been ahead of the curve in choosing their investments.
“Ever since Stake started they over-indexed on Tesla, Nio, Solo. New Zealanders are just a little bit deeper in the US market in some of the areas a lot of other investors don’t go to. That could just be a structural thing, it also could be because New Zealanders have been looking internationally for longer.”
Rival electric carmaker Tesla is also one of the most popular overseas stocks held by New Zealand retail investors.
“Obviously Tesla had a huge run over the last six months. If you look at the market they [Rivian]are going for, SUVs are enormous in the US and Tesla is focused on the sedan and the family movers.
“This is the biggest segment in America. They are petrol guzzlers so this is a real key area, plus they have got some really strong backers.”
Gus Watson, head of investment at Sharesies, said Kiwi investors loved technology and the mega-trend around electric vehicles and sustainability.
“They really like the leaders out there like Elon Musk, he has a strong following. And this particular one has another personality behind it, which is Jeff Bezos through Amazon.”
Amazon owned just under 20 per cent of Rivian at listing while Ford owned about 13 per cent.
Watson said the average amount invested was about $2000, which was higher than the average amount for other IPOs.
“I think why this one was so popular, we saw large bits of money from each investor and the reason behind that is that globally it’s the biggest IPO this year, so you would expect more money to go behind a bigger company raise.”
Comparatively, the platform had more investors in Allbirds but with much smaller amounts invested.
Hatch general manager Kristen Lunman said EV stocks were relatively popular with its investors.
“They are considering trends that support sector growth, including consumer shifts to electric and continued legislation to accelerate adoption.
“Combined with increasing supply, improving technology and falling costs, many believe the future of EVs is bright.”
Cleanaway for Waste Management?
Could Australia’s Cleanaway buy back New Zealand’s Waste Management less than a decade after selling it?
“No comment,” said Cleanaway in response to an inquiry from Stock Takes.
The Australian Financial Review had speculated that Cleanaway was running the numbers on Waste Management NZ, which is up for sale via its Chinese private equity owner Beijing Capital.
Cleanaway – formerly Transpacific – sold its New Zealand business for $980m in 2014 to pay down debt.
In August, financial news agency Bloomberg said Beijing Capital was exploring a sale of the once-listed Waste Management.
The agency, quoting people with knowledge of the matter, said Beijing Capital had asked investment banks for proposals on the potential divestment of the company, now called Beijing Capital Waste Management NZ.
Beijing Capital could also consider selling a partial stake in the business, one source told Bloomberg.
A return of Waste Management to the NZX would be a welcome sight for investors, having been a market favourite before it was delisted in 2006 following the amalgamation with Transpacific.
Milford Asset Management has been gobbling up more shares in My Food Bag over the past six months.
A notice to the exchange this week revealed the fund manager increased its stake from 7.59 per cent to 8.796 per cent through share purchases made between June 4 and November 11, shelling out $3.4m for them.
My Food Bag, which is due to report its half-year result today, has seen its shares slump since listing in March. It closed its first day of trading on $1.74 but has sunk as low as $1.18 this month.
Shareholders will be hoping for some upbeat news at the result briefing to stem the decline.
AFT Pharmaceuticals is lining up to pay its first dividend next year if it meets targets for net debt and earnings.
The drug-maker’s revenue rose 14 per cent to $55.5m while its net profit for the six months to September 30 was $4.2m, up from $1.2m in the prior half.
AFT managing director Dr Hartley Atkinson said it was keen to pay a dividend. “Our shareholders do ask us about that at AGMs, so obviously it is something people do focus on.”
The company told the exchange it would consider a dividend policy once it had reached a net debt target of $25m to $30m and its earnings guidance of $18m to $23m. Its current net debt was $32.4m, down from $35.2m at the end of March 2021.
“We are working on reaching that during this next half.”
Atkinson said AFT’s debt had stayed higher than it anticipated as it held extra inventory because of logistics and shipping problems due to Covid.
“Despite that our debt has still come down this last six months and our cash balance has still improved.”
The cost of shipping had started to come down but increased airfreight would be key to moving the dial. It was already helping in Australia where, airfreight had recently opened up, he said.
“In New Zealand they haven’t so it may take a bit longer.”
The delays meant it was taking up to 10 weeks to get new products from the manufacturer to the market, compared to six weeks in pre-Covid times.
Atkinson said AFT regularly talked to logistics experts and his gut feeling was that the shipping delays could last for another six to 12 months.
AFT shares rallied 15c or 3.23 per cent to $4.80 after the result announcement but remained down 14.22 per cent or 82.5c over the last year.
Kiwi cryptocurrency platform Easy Crypto has been on a hiring spree following its recent $17m Series A capital raising.
The company will bring on board three returning Kiwi expats from overseas to bolster its executive team.
Anna Walmsley will return from a role at American Express in New York to a chief of staff role, while consumer technology marketing expert Glen Chean has been appointed chief marketing officer.
Chean joins from China-based mobile communications brand OPPO, and boasts 20 years’ experience with multinational consumer technology brands, including Huawei, LG Electronics, Samsung and Sony.
Martin Pratt has been appointed chief technology officer, joining from Berlin-based digital health start-up Medudoc.
Easy Crypto co-founder and CEO Janine Grainger said securing leaders of this calibre reflected the growing place of cryptocurrency in global financial ecosystems.
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