Chamath Palihapitiya defends Rivian's $110 billion market cap, and says the EV startup's critics remind him of Tesla bears

• Billionaire investor Chamath Palihapitiya has defended EV startup Rivian, after criticism about its $110 billion market cap.
• Palihapitiya said investors have seen and liked Rivian's product and that it had taken a "smart path to market."

Billionaire investor Chamath Palihapitiya has defended the market valuation of electric-vehicle startup Rivian, saying investors think the company has a solid product and the underwriters of the deal are experts in what they do.

Speaking on his podcast at the weekend, Palihapitiya said people criticising Rivian's market capitalization of $110 billion reminded him of the group of investors who have consistently bet against Tesla.

Rivian went public last week in the biggest US market debut since Facebook in 2012. The company has since soared from an IPO price of $78 a share to a closing price of $129.95 on Friday. That gave Rivian a market capitalization of $110.8 billion, or $130.1 billion on a fully diluted basis.

Rivian's valuation has been criticized by many investors, given that the company is yet to produce any meaningful revenue and has made fewer than 200 vehicles. Some have said it's a sign of a stock market bubble.

Yet Palihapitiya defended the company on the All In podcast on Saturday against his co-host and fellow investor Jason Calacanis, who said the EV maker was way overvalued.

Palihapitiya said investors had seen and liked Rivian's product, and pointed to the fact that it has already signed a deal to sell 100,000 electric trucks to e-commerce giant Amazon.

"What I have heard is that it's a well-engineered truck [and] they've done a very smart path to market, which is essentially to build these delivery trucks for Amazon," he said.

Palihapitiya said people shouldn't attack Rivian just because major investors think it's worth $100 billion or more.

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He also defended the investment banks that underwrote the IPO and were crucial to gaining the company its market valuation, saying they are skilled at what they do.

Palihapitiya dismissed those who say they think they know what Rivian is really worth, after Calacanis said he thought the EV startup should be valued at about $20 billion.

He said such estimates are "superficial" and remind him of the arguments made by the "Tesla-Q guys." That group of investors have bet against Tesla in recent years, making consistent losses as the company has soared to a market capitalization of more than $1 trillion.

Rivian has been backed heavily by such big names as Amazon and Ford. Morgan Stanley, Goldman Sachs and JPMorgan led the public offering.

Palihapitiya shot to investing fame in 2020 and became known as the "SPAC King" after launching multiple blank-check companies and merging them with other firms. He was formerly a Facebook executive and has invested in tech startups such as Slack and Yammer.

He said he doesn't have a position in Rivian. But SoFi, a trading platform that merged with a Palihapitiya SPAC earlier this year, had the rights to sell retail investors a small amount of Rivian stock during the company's IPO.

Rivian, which trades on the Nasdaq under the RIVN ticker, rose 3.59% on Monday to $134.61 a share.