Investors generally don’t get happy when a stock they put money in starts talking about raising money. That much was clear today as electric vehicle stock Rivian (NASDAQ:RIVN) went back to the well, hat in hand, to attempt to raise some new cash well before expected. That was enough to send shares plummeting over 20% at one point in Thursday afternoon’s trading.
Rivian isn’t looking for a few bucks to hold it over until payday, either. Rivian plans to sell a slate of green convertible senior notes with a due date of 2030. It’s also going to open up sales of another $225 million worth of convertible notes. And all of this is on top of the revenue it’s currently pulled in, which is expected to be somewhere between $1.29 billion and $1.33 billion.
Why does Rivian need this kind of money? Well, a new report notes that Rivian is actually losing money on every truck it sells, and not just a few bucks, either. No, Rivian loses over $30,000 on nearly every truck it sells. Rivian is frantically working to cut its costs in order to achieve its goal of profitability by the end of 2024, and it’s already looking for $40,000 in cost savings per vehicle to achieve that. It’s certainly got demand, especially with its newly-announced Max battery pack, that’s finally in production. Now, Rivian R1T and R1S vehicles can reach over 400 miles on a single charge, which brings it in line with many gas vehicles.
Is Rivian a Buy, Sell, or Hold?
Rivian stock enjoys at least some analyst support. Consensus-wise, it’s rated a Moderate Buy, supported by 13 Buy ratings, seven Holds, and one Sell. With an average price target of $28.57, Rivian stock offers investors 50.53% upside potential.
