Rivian shares fall after 75 million-share capital raise plan
The EV maker said proceeds would support equity contributions tied to a US Energy Department loan agreement and issued preliminary second-quarter figures.
By Sarah Jenkins · Chief Macro Economics Correspondent
· 2 min read
Rivian Automotive shares fell more than 10% in Tuesday premarket trading after the electric vehicle maker announced plans to issue 75 million Class A common shares in a public offering. At Monday’s closing price of $20.14 a share, the sale would raise about $1.51 billion.
CNBC quote data showed Rivian at $17.93 at 8:55 a.m. EDT, down $2.21, or 10.97%. The move followed an 8.1% gain in the stock on Monday and a 19% rise last week, according to CNBC.
Rivian said in a public filing that it expects to use the proceeds to fund equity contributions required under a loan agreement with the U.S. Department of Energy. The company also said it plans to give the offering’s underwriters a 30-day option to purchase up to 11.25 million additional shares.
A common-stock offering raises cash by selling equity to investors. If the company issues new shares, the transaction increases the share count and reduces existing holders’ percentage ownership, although it can also strengthen the issuer’s liquidity for planned spending and financing commitments.
Preliminary second-quarter figures
In a separate public filing, Rivian released selected preliminary results for the second quarter. The company estimated revenue of $1.55 billion to $1.65 billion for the period, above the $1.45 billion average analyst estimate compiled by LSEG.
Rivian also estimated that cash, cash equivalents and short-term investments totaled $5.3 billion at the end of the second quarter. That compared with $4.8 billion at the end of the first quarter, according to the filing.
The capital raise comes after Rivian suspended plans tied to a 2027 profitability target because of an expected increase in research and development spending for autonomy and next-generation vehicle technologies, CNBC reported. The company is also launching its R2 midsize SUV, a vehicle CNBC reported Rivian hopes will help it reach profitability toward the end of the decade.
Rivian’s financing plans place the company’s liquidity and investment needs in focus as electric vehicle makers fund product launches, factory plans and software development in a market where capital intensity remains high. The company’s filings did not specify a final offering price or identify how much would be raised if underwriters exercised the additional-share option.
This story draws on original reporting from CNBC.
