Rivian, often dubbed as "Tesla's rival" and backed by major investors Amazon and Ford, shocked investors with its unexpected announcement to issue $1.5 billion in convertible notes. This revelation led to a nearly 23% drop in Rivian's stock on Thursday, marking its worst single-day performance since its U.S. IPO.
Despite the setback, Rivian's stock has seen an overall increase of over 5% since the beginning of the year, thanks to a significant rebound in U.S. stocks. However, as of Thursday's close, it has fallen 35% from its peak in July. From its all-time high in November 2021, the month of its IPO, the stock has plummeted approximately 90%.
Rivian plans to issue $1.5 billion in unsecured "green" convertible notes due in 2030. Buyers have the option to purchase an additional $225 million in notes.
In a document submitted to regulators on Wednesday evening, Rivian also provided a preliminary estimate for its third-quarter revenue, which aligns closely with Wall Street's predictions. The company will officially release its Q3 financial report after the market closes on November 7.
Rivian anticipates Q3 revenues to range between $1.29 billion and $1.33 billion, roughly in line with Wall Street's prior estimate of $1.3 billion. The company expects its cash and cash equivalents to be $9.1 billion as of September 30, a decrease from $10.2 billion at the end of the second quarter, indicating a deteriorating balance sheet.
Earlier this week, Rivian released its latest delivery and production figures, which exceeded Wall Street's expectations. Specifically, the company delivered 15,564 vehicles in the third quarter, surpassing the market's estimate of 14,973. Production stood at 16,304 vehicles, higher than the anticipated 15,545. Rivian's annual production forecast is 52,000 vehicles, slightly below the market's prediction of 53,654.
In August, Rivian's Q2 financial report revealed better-than-expected performance, prompting an upward revision of its annual guidance:
- Q2 revenue reached $1.12 billion, surpassing the market's $1 billion forecast.
- Adjusted per-share loss was $1.08, narrower than the anticipated loss of $1.37.
- With increased deliveries and improved efficiency in Q2, the adjusted loss per vehicle sold was $31,595, down from a loss of $67,329 in Q1.
- The company also raised its production guidance for the year and reduced its loss expectations.
- The CEO stated that due to cost controls, the company had sufficient funds to last until 2025.
Earlier this year, Rivian took measures to curb expenses and enhance its balance sheet, including a 6% workforce reduction in February and a $1.3 billion convertible note issuance in March. Additionally, the company postponed the launch of its smaller R2 vehicle series at its $5 billion Georgia factory until 2026.
On Thursday, Tesla's stock saw a slight decline of 0.43%, while "Vietnam's Tesla," VinFast Auto (VFS), rose 5.59% to close at $8.50.
