Dan Loeb's hedge fund Third Point netted a $300 million profit from Rivian's IPO, report says

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Dan Loeb's hedge fund Third Point netted a $300 million profit from Rivian's IPO, report says
Rivian's IPO was one of the biggest in history.Michael M. Santiago/Getty Images
  • Daniel Loeb's Third Point made a $300 million profit on the back of Rivian's huge IPO, the Financial Times has reported.
  • The hedge fund made a number of investments over the last year, including in convertible notes which turned into shares.

Third Point, the hedge fund of billionaire investor Daniel Loeb, scored a $300 million gain from electric-vehicle startup Rivian's blockbuster IPO earlier this month, according to the Financial Times.

The FT reported that Third Point, which has $20 billion under management, won big after making a number of investments over the last year. The newspaper cited investor letters and a person with knowledge of the matter.

Those investments included $167 million in Rivian's convertible note, the FT reported, which the hedge fund then switched into shares at the time of the IPO. Third point is up more than 35% in the first 10 months of the year.

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Third Point did not immediately respond to Insider's request for comment.

Electric truck-maker Rivian started trading on the Nasdaq in spectacular style on November 10, despite the fact that the company has only delivered a handful of vehicles and suffered a $994 million loss in the first half of the year.

Rivian initially priced its shares at $78, giving it a valuation of $66.5 billion. But the stock soared as high as $119.46 on the day of the offering before closing at $100.73. It raised $11.9 billion in what was one of the biggest IPOs of all time.

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Since then, the startup's stock has risen as high as $179 a share before cooling to $119.85 at Tuesday's close.

Rivian has a market capitalization of $106 billion, or $120 billion on a fully-diluted basis, more than Ford or General Motors despite never having had any significant revenue.

However, the FT reported that Loeb has praised the company and its founder and chief executive RJ Scaringe in investor letters.

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He said he was "deeply impressed" by Scaringe's "charismatic vision and approach to designing a new type of automotive company."

Loeb also praised Rivian's deal with Amazon to supply 100,000 delivery trucks. "As Amazon seeks to become a dominant player in logistics while being carbon neutral, we believe that Rivian will be their end-to-end fleet provider of choice," he wrote, according to the FT.

Amazon itself was a big winner from the IPO and currently owns 18% of the company, according to Bloomberg data. Investment company T. Rowe Price and Ford also scored big gains, and now own 15% and 12% respectively.

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