Rivian Automotive Inc. shares fell the most ever after the electric-vehicle maker announced plans to issue $1.5 billion in convertible debt.
(Bloomberg) — Rivian Automotive Inc. shares fell the most ever after the electric-vehicle maker announced plans to issue $1.5 billion in convertible debt.
The Irvine, California-based company plans to offer green convertible senior notes due in 2030 as a private offering to qualified institutional buyers, according to a securities filing Wednesday. It granted the purchasers an option to buy an additional $225 million.
The stock sank 23% on Thursday, its biggest drop since Rivian’s initial public offering in November 2021. The plunge wiped out Rivian’s year-to-date gains.
The cash raise came “much earlier than we expected,” but in line with expectations, Chris McNally, an analyst at Evercore ISI with an outperform rating on the stock, wrote in a research note Thursday.
Rivian estimated its cash, cash equivalents and short-term investments totaled $9.1 billion as of quarter-end, down from $10.2 billion in the second quarter. Evercore said that cash burn rate was in line with its projections.
Rivian also said it expects revenue for the three months ended Sept. 30 in a range of $1.29 billion to $1.33 billion, compared with a $1.3 billion average estimate from analysts surveyed by Bloomberg.
The bond issuance, which could dilute the current shareholders’ interests, comes after the company disappointed investors earlier this week by maintaining its full-year guidance for producing 52,000 battery-electric vehicles this year.
Rivian manufactures two consumer models and a plug-in delivery van for Amazon.com Inc., its biggest shareholder. It’s a front-runner in a large pack of startups chasing market incumbent Tesla Inc., but has struggled with supply-chain challenges and a slow ramp since its November 2021 initial public offering.
Rivian plans to release its official financial results for the third quarter on Nov. 7.
(Updates with close of trading in third paragraph.)
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