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Just days ago the company said it delivered more units than expected in the third quarter.
Courtesy of Rivian
Shares of electric truck maker
Rivian Automotive
were falling early Thursday after it gave disappointing guidance and announced plans to raise more funds.
Rivian (ticker: RIVN) declined 7.6% in premarket trading. The disappointing guidance comes days after the company said it delivered more units than expected in the third quarter.
On Wednesday after the market closed, Rivian said that sales in the current quarter would be slightly lower than analysts estimated. It also said it would issue $1.5 billion in convertible notes–debt that can be turned into shares, which has the potential to dilute the holdings of current owners.
Rivian’s vehicles are tempting for American buyers of electric-powered pickup trucks that handle like sports cars. But they sell at about $80,000 on average, and developing them is expensive. The company is burning through cash–it sold trucks at an average loss of $33,000 in the second quarter.
Rivian’s stock has seen some big swings. It’s up more than 25% since Jan. 1, but is still 36% lower than 12 months ago. It has burned through about half of its $18 billion cash pile. Shares are down some 70% since it raised $12 billion in a 2021 initial public offering.
The challenge for the company now is to reduce costs and streamline production. The company says that the current losses are necessary to get the company growing. It plans to make a profit on its vehicles in 2024.
Write to Brian Swint at brian.swint@barrons.com