Rivian shares drop after 75 million-share offering plan
Rivian moved to sell new stock after recent gains, with proceeds intended for commitments tied to a U.S. Energy Department loan.
By Sofia Marchetti · World Affairs Correspondent
2 min read
Rivian Automotive shares fell more than 10% in premarket trading Tuesday after the electric vehicle maker announced plans to sell 75 million shares of Class A common stock. The offering matters because it would bring in new capital as Rivian funds plant-related commitments and continues spending on future vehicles and technology.
CNBC reported that the capital raise was announced in extended trading after a strong run for the stock. Rivian shares had gained 8.1% on Monday and rose 19% last week, according to CNBC.
Based on Monday’s closing price of $20.14 a share, the offering would raise about $1.51 billion, CNBC reported. Rivian said in a public filing that it plans to use the proceeds to fund equity contributions connected to a loan agreement with the U.S. Department of Energy.
The company also said in the filing that it expects to give underwriters a 30-day option to buy as many as 11.25 million additional shares.
Funding comes as Rivian spends on new programs
The share sale follows a shift in Rivian’s profitability timeline. CNBC reported that Rivian had suspended plans for a 2027 profitability target because it expects a rise in research and development spending tied to autonomy and next-generation vehicle technologies.
Rivian is also preparing its R2 midsize SUV, a model the company hopes will help it become profitable toward the end of the decade, according to CNBC. The company has positioned the R2 as an important part of its next phase, while the new offering gives it additional capital for obligations linked to its Energy Department loan agreement.
Rivian did not just announce the stock sale. In a separate public filing, the company released preliminary second-quarter figures that pointed to higher revenue than analysts had expected.
Rivian estimated second-quarter revenue between $1.55 billion and $1.65 billion. That range was above the average analyst estimate of $1.45 billion compiled by LSEG, according to CNBC.
The company also estimated that its cash, cash equivalents and short-term investments stood at $5.3 billion at the end of the second quarter. Rivian had $4.8 billion at the end of the first quarter, according to the filing cited by CNBC.
Stock reaction
The market reaction was negative despite the preliminary revenue outlook. CNBC’s quote data showed Rivian down $2.21, or 10.97%, to $17.93 in Tuesday premarket trading.
The decline came after the stock’s recent gains, leaving investors to weigh stronger-than-expected revenue indications against the impact of a large new share sale. Rivian’s filing identified the capital raise as a way to support commitments under its Energy Department loan agreement, while its recent guidance changes show continued spending pressure as the company builds toward new vehicle launches.
This story draws on original reporting from CNBC.