Rivian Stock Falls 10% as Company Sells 75 Million Shares to Raise Capital

Rivian Automotive announced a public offering of 75 million shares of its Class A common stock, causing the stock to fall more than 10% during premarket trading on Tuesday. The capital raise would generate approximately $1.51 billion based on Monday's closing price of $20.14 per share. Rivian stated in a filing that proceeds will fund equity contributions as part of a loan agreement with the U.S. Department of Energy. The offering follows the company's suspension of its 2027 profitability target due to increased research and development spending for autonomy and next-generation vehicle technologies.

Rivian Announces 75 Million Share Offering for DOE Loan Funding

Rivian announced the public offering during extended hours trading after shares rose 8.1% on Monday. Based on Monday's close of $20.14 per share, the company would raise roughly $1.51 billion with the offering. Rivian said in a filing that it plans to use the proceeds to fund equity contributions as part of a loan agreement with the U.S. Department of Energy. The company stated in the public filing that it intended to grant underwriters an option for a period of 30 days to purchase up to an additional 11.25 million shares.

Stock Performance Shows Recent Volatility

The stock increased 19% last week before Monday's 8.1% gain. The Tuesday premarket decline of more than 10% followed the announcement of the share offering. The capital raise comes as Rivian is launching its new R2 midsize SUV, which the company hopes will lead it to profitability toward the end of this decade.

Rivian Estimates Q2 Revenue Above Analyst Expectations

Rivian pre-released some second-quarter results in a separate public filing. The company estimated revenue to be between $1.55 billion and $1.65 billion during the second quarter, above average analyst estimates compiled by LSEG of $1.45 billion. Its cash, cash equivalents and short-term investments balance was an estimated $5.3 billion, up from $4.8 billion to end the first quarter, according to the filing.

FAQ

Why did Rivian stock fall on Tuesday? Rivian stock fell more than 10% during premarket trading on Tuesday after the company announced a public offering of 75 million shares of its Class A common stock.

How much capital will Rivian raise from the share offering? Based on Monday's closing price of $20.14 per share, Rivian would raise approximately $1.51 billion from the 75 million share offering, with an additional option for underwriters to purchase up to 11.25 million more shares within 30 days.

What is Rivian's estimated revenue for Q2? Rivian estimated second-quarter revenue to be between $1.55 billion and $1.65 billion, which is above the average analyst estimate of $1.45 billion compiled by LSEG.