Rivian Stock Price Extends Losses on Plans for a $1.5Bn Green Bond

The Rivian Automotive Inc (NASDAQ: RIVN) stock price extended its losses today. It was trading down over 2.50% as investors continued reacting to news that the company was planning to issue a $1.5 billion green convertible bond due in 2030. 

The electric vehicle manufacturer revealed yesterday that it expects its Q3 2023 revenues to be between $1.29 billion and $1.33 billion. The revenue range is within analysts' average estimates of $1.3 billion. The company also revealed that it had $9.1 billion in cash and equivalents as of September 30, 2023. 

Rivian shares closed down over 22% yesterday and opened lower today as the company continues to lose money on each vehicle it makes. A recent report revealed that the EV manufacturer loses $30,000 on every vehicle it makes and sells, which is a significant amount. 

The company has taken steps to slash costs in a bid to cut over $40,000 from the manufacturing costs of each vehicle to become profitable by its target of the end of 2024. However, some analysts have opined that the company might need to raise the prices of its vehicles to break even and become profitable. 

Still, Rivian’s founder and CEO, RJ Scaringe,  has commented that the company does not need to meet all its cost-cutting measures to become profitable. A key cost-cutting measure would be to increase the company's scale by expanding operations at its manufacturing facility in Normal, Illinois. 

The decline in Rivian’s share price was driven by investor worries about the company’s need to raise more capital when it still had $9.1 billion in cash. Given that the firm is burning through slightly over a billion each quarter since it had $10.2 billion in cash at the end of Q2 2023, there was no rush to raise more cash. 

The EV manufacturer is still implementing its cost reduction measures, and it will be interesting to see how much the firm can reduce its cash burn in Q4 2023. The company manufactured 16,304 vehicles and delivered 15,564 units to customers in Q3 2023.

Rivian had issued another green bond worth $1.3 billion in March 2023, and many expected the firm to raise money later. 

Rivian stock price. 

The Rivian stock price extended yesterday’s losing streak and was down 2.75% to trade at $7.75.