Rivian Automotive (RIVN) shares plummeted 18% following the announcement of a public offering to sell 75 million shares, aiming to raise approximately $1.51 billion. The funds are earmarked for equity contributions related to a U.S. Department of Energy loan agreement.
The electric vehicle maker also provided a positive outlook on its second-quarter revenue, projecting it between $1.55 billion and $1.65 billion, exceeding analyst expectations. This capital raise occurs as Rivian navigates increased R&D spending and prepares for the launch of its new R2 SUV.
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Rivian Automotive (RIVN) experienced a significant drop in its stock value, falling 18% in midday trading on Tuesday. This sharp decline followed the electric vehicle manufacturer's announcement of a public offering to sell 75 million shares of its Class A common stock, a move aimed at raising capital.
The stock's performance on Tuesday marked its worst day since 2024 and its fifth worst day in the company's history. This capital raise comes after a period of positive momentum for Rivian shares, which had risen 8.1% on Monday and an impressive 19% in the preceding week.
Based on Monday's closing price of $20.14 per share, the offering is expected to generate approximately $1.51 billion. Rivian has stated in a regulatory filing that the proceeds from this offering will be used to fund equity contributions as part of a loan agreement with the U.S. Department of Energy. The company also intends to grant underwriters a 30-day option to purchase an additional 11.25 million shares.
This capital infusion is particularly relevant as Rivian recently suspended its plans for achieving profitability by 2027. The company cited anticipated increases in research and development spending for autonomy and next-generation vehicle technologies as the reason for this adjustment.
Furthermore, Rivian is gearing up for the launch of its new R2 midsize SUV, a vehicle the company hopes will be instrumental in driving it toward profitability by the end of the decade. The R2 is seen as a key competitor in the growing electric SUV market.
In addition to the capital raise news, Rivian pre-released preliminary second-quarter financial results. The company estimates its revenue for the quarter to be between $1.55 billion and $1.65 billion, surpassing the average analyst estimate of $1.45 billion compiled by LSEG. Rivian's cash, cash equivalents, and short-term investments balance was estimated at $5.3 billion, an increase from the $4.8 billion recorded at the end of the first quarter.
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