Rivian Shares Tumble After Surprise $1.5 Billion Convertible Notes Offering

Shares of Rivian dropped over 22% on Thursday following the company’s unexpected announcement to offer $1.5 billion in convertible notes. The news came despite Rivian’s third-quarter revenue estimates aligning with Wall Street expectations.

In a regulatory filing on Wednesday, Rivian disclosed its third-quarter revenue is expected to be between $1.29 billion and $1.33 billion. These figures are roughly in line with Wall Street estimates of $1.3 billion, according to LSEG, formerly known as Refinitiv. The company also reported that its cash and equivalents stood at $9.1 billion as of September 30, a decrease from $10.2 billion at the end of the second quarter.

Earlier this year, Rivian implemented measures to slow spending and strengthen its balance sheet, including a 6% staff reduction in February and a $1.3 billion sale of convertible notes in March. The automaker also postponed the launch of its smaller R2 vehicle platform to 2026 from 2025. However, the latest $1.5 billion convertible notes offering caught investors off guard, reports CNBC.

The notes will be senior, unsecured “green” convertible notes due in 2030. Buyers will have the option to purchase up to an additional $225 million worth of notes, according to the company.

Rivian had reported better-than-expected third-quarter deliveries on Monday and is set to announce its third-quarter earnings after the U.S. markets close on November 7.

As of writing, shares of Rivian are up 0.88% in after hours trading.