Rivian's stock fell by more than 10% during premarket trading on Tuesday following the announcement of a public offering of 75 million shares of its Class A common stock [1]. The company expects to raise approximately $1.51 billion from the offering, based on Monday's closing price of $20.14 per share [1]. Rivian stated in a public filing that the proceeds will be used to fund equity contributions as part of a loan agreement with the U.S. Department of Energy [1]. Additionally, the company intends to grant underwriters a 30-day option to purchase up to an additional 11.25 million shares [1].
This capital raise comes after Rivian shares had increased 8.1% on Monday and 19% over the previous week [1]. The company recently suspended its 2027 profitability target due to anticipated increases in research and development spending, particularly for autonomy and next-generation vehicle technologies [1]. Rivian is also in the process of launching its new R2 midsize SUV, which it hopes will drive profitability toward the end of the decade [1].
In a separate public filing, Rivian pre-released some second-quarter results, estimating revenue between $1.55 billion and $1.65 billion, which is above the average analyst estimate of $1.45 billion compiled by LSEG [1]. The company's cash, cash equivalents, and short-term investments were estimated at $5.3 billion, up from $4.8 billion at the end of the first quarter [1].
CONCLUSION
Rivian's decision to raise $1.51 billion through a public share offering led to a significant drop in its stock price, despite the company projecting second-quarter revenue above analyst expectations. The capital raise and increased R&D spending signal Rivian's commitment to long-term growth, though near-term profitability targets have been delayed.