The company's shares fell about 9% in extended trading on Monday after it announced plans to offer 75 million new shares, even as it projected second-quarter revenue that comfortably exceeded Wall Street expectations.
Based on Monday's closing share price of $20.14, the offering is expected to raise roughly $1.5 billion. According to a regulatory filing, Rivian intends to use the proceeds to fund equity contributions tied to its loan agreement with the U.S. Department of Energy, providing additional financial support for its manufacturing expansion.
The capital raise comes at a crucial stage for the automaker as it accelerates development of its next-generation R2 SUV, a smaller and more affordable electric vehicle widely viewed as essential to Rivian's plans to reach a broader customer base and achieve sustained growth.
Earlier this year, Rivian announced it had secured a revised $4.5 billion government loan package to finance the construction and equipment of its manufacturing facility in Georgia. The plant is expected to become the primary production hub for the R2 SUV, with the company planning to begin drawing from the loan early next year.
Although the stock offering pressured shares, it follows a period of improving operational performance for Rivian. Last week, the company reported stronger-than-expected second-quarter vehicle deliveries and raised its full-year delivery forecast, sending its stock up more than 17% before Monday's announcement.
Explaining the timing of the fundraising, a company spokesperson told Reuters that the market reaction meant it was "the right time for Rivian to secure additional funding."
The issuance of new shares will increase Rivian's total shares outstanding, diluting the ownership stake of existing shareholders—a factor that often weighs on stock prices even when companies are raising capital for growth initiatives.
Alongside the fundraising announcement, Rivian also issued an upbeat financial outlook. The company expects second-quarter revenue to range between $1.55 billion and $1.65 billion, significantly above analysts' average estimate of $1.45 billion, according to data compiled by LSEG.
Rivian further estimated that its cash and cash equivalents stood at approximately $5.3 billion at the end of June, an increase from $4.8 billion at the close of the first quarter, reflecting a stronger liquidity position as it prepares for future investments.
Investors will get a clearer picture of the company's financial health and production progress when Rivian releases its full second-quarter earnings report on July 30. The results are expected to provide further insight into demand for its premium R1S SUV and R1T pickup, as well as updates on the development timeline for the highly anticipated R2 platform.