New Share Sale Drags Rivian Automotive (RIVN) Down by 18%

Rivian Automotive Inc. (NASDAQ:RIVN) is one of the 10 Stocks Investors Are Running Away From.

Rivian Automotive saw its share prices decline by 18.12 percent on Tuesday to close at $16.49 apiece, as investors soured on its plans to sell up to 86.25 million new shares to repay existing debt.

In a statement on Monday, Rivian Automotive Inc. (NASDAQ:RIVN) said that the follow-on offer would involve the primary sale of 75 million common shares and up to 11.25 million in overallotment option for its underwriters.

The R2. Photo from Rivian Automotive

Proceeds from the offer will be used to fund general corporate purposes, including the repayment of its loan with the Department of Energy.

Earlier this year, Rivian Automotive Inc. (NASDAQ:RIVN) was able to draw a $4.5 billion loan from the DOE to help finance construction of its new manufacturing facility in Georgia.

The amount was lower than the $6.57 billion initial loan, which would have supported two phases for a total production capacity of 400,000 units annually. However, the amended loan only covers the first phase of manufacturing with a total capacity of 300,000 vehicles a year.

The expansion initiative supports the recently launched R2 mid-size SUV, which has been rolling off the production line at the company’s manufacturing facility in Normal, Illinois. Initial deliveries officially kicked off, with Rivian Automotive Inc. (NASDAQ:RIVN) extending invitation orders for existing R2 reservation holders.

While we acknowledge the risk and potential of RIVN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RIVN and that has 10,000% upside potential, check out our report about the cheapest AI stock.

READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy. 

Disclosure: None. Follow Insider Monkey on Google News.

1281292 - 11759070 - 1