RIVIAN STOCK FALLS 10% AS CARMAKER ANNOUNCES 75M SHARE OFFERING

Rivian Automotive announced a public offering of 75 million shares of Class A common stock on Tuesday, prompting a 10% drop in the company's share price during premarket trading. Based on Monday's closing price of $20.14 per share, the offering would raise approximately $1.51 billion. Rivian stated it intends to use the proceeds to fund equity contributions as part of a loan agreement with the U.S. Department of Energy. The company also granted underwriters an option to purchase up to an additional 11.25 million shares over a 30-day period.

Rivian's share price had risen 8.1% on Monday and 19% over the previous week before the announcement. In a separate public filing, the company pre-released second-quarter revenue estimates of between $1.55 billion and $1.65 billion, figures above analyst consensus compiled by LSEG of $1.45 billion. The company reported cash, cash equivalents and short-term investments of $5.3 billion at the time of the filing, an increase from $4.8 billion at the end of the first quarter. The capital raise follows Rivian's decision to suspend a 2027 profitability target due to anticipated increases in research and development spending for autonomy and next-generation vehicle technologies.

The offering reflects Rivian's strategy to secure funding whilst investing in advanced technologies. The company's revised financial projections suggest confidence in its second-quarter performance relative to market expectations. Rivian's cash position strengthened during the first half of the year despite the planned capital injection from the Department of Energy loan facility.