Rivian plunges 14% on 75M share offering as dilution fears mount

Rivian Automotive priced a 75 million share secondary offering, sending the stock down 14% to about $17 in Tuesday trading.

"It was the right time for Rivian to secure additional funding," a company spokesperson told Reuters, as the automaker prepares to draw on a revised $4.5 billion US Department of Energy loan for its Georgia manufacturing facility.

The base deal could raise roughly $1.5 billion based on Monday's close of $20.14, or as much as $1.7 billion if underwriters exercise their 30-day option for an additional 11.25 million shares. Proceeds will fund equity contributions tied to the DOE loan agreement and general corporate purposes, according to a regulatory filing. The offering adds to 1.34 billion shares already outstanding, diluting existing holders.

The decline wipes out most of Rivian's 23% one-month gain heading into the announcement. The company preannounced second-quarter revenue of $1.55 billion to $1.65 billion, above the $1.45 billion consensus, and raised its full-year delivery forecast to 65,000 to 70,000 vehicles. Rivian reports full Q2 results on July 30.

The selloff spread across the EV sector, with Lucid Group falling 9% to $6 and Tesla down 3% to $408, reversing Monday's sector-wide rally.

Rivian estimated its cash and equivalents at about $5.3 billion at the end of June, up from $4.8 billion at the close of the first quarter. The company plans to begin drawing on the DOE loan early next year to finance construction of its Georgia plant, which will become the primary production hub for the R2 SUV — a smaller, more affordable model viewed as critical to Rivian's path to broader market reach and sustained growth.

The offering signals Rivian is prioritizing balance sheet strength over near-term stock price, betting that the R2 platform can justify the dilution. Investors will watch the July 30 earnings report for updates on R2 development timelines and gross margin trajectory.

This article is for informational purposes only and does not constitute investment advice.