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Rivian (RIVN) stock falls on news of $1.3 billion capital raise

The company plans to sell convertible notes as a way to help raise money for the launch of its R2 vehicles.

Morgan Shaver

March 7, 2023 10:35 AM

Rivian

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Rivian (RIVN) recently shared plans to raise $1.3 billion in cash through the sale of convertible notes. As a result of this announcement, Rivian stock fell, with shares down roughly 11 percent in midday trading on Tuesday as reported by outlets like CNBC.

For those unfamiliar, convertible notes are essentially a type of bond that can be repaid with cash, stock, or a mixture of both. Rivian is said to be pursuing these notes in an effort to fund the development and launch of its upcoming R2 series of vehicles. Investors who purchase these notes will reportedly have the option to buy additional notes worth up to $200 million if they choose, above the initial $1.3 billion.

The convertible notes will also qualify as “green bonds” which means they meet a set of criteria that “tends to attract institutions willing to accept lower returns in exchange for supporting sustainable development” as explained by CNBC. The notes will mature in March 2029, with the interest rate and further terms to be decided when the offering is priced.

Rivian has stressed that it isn’t in an urgent cash crunch situation just yet, with the electric vehicle manufacturer having $12.1 billion on hand as of the end of 2022 as shared during its Q4 earnings presentation. Rivian has also said it has enough to fund operations through 2025, but has contradicted this with money-saving measures including laying off 6 percent of its workforce back in February.

Outside of today’s stock dip, Rivian shares have lost over 80 percent of their value since debut, as noted by CNBC. Now that you’re caught up with Rivian’s endeavors in selling convertible notes, be sure to brush up on some of our previous reporting including Amazon (AMZN) Q4 2022 net income hit by $2.3 billion valuation loss in Rivian, and Rivian being among the cars eligible for the $7,500 IRS EV clean vehicle tax credit.

Morgan Shaver

Senior Editor

Morgan is a writer from the frozen wastelands of Maine who enjoys metal music, kpop, horror, and indie games. They're also a Tetris fanatic who's fiercely competitive in games like Tetris 99... and all games in general. But mostly Tetris. You can follow Morgan on Twitter @Author_MShaver.