(Reuters) – Shares of Rivian slipped 9% in extended trading on Monday after the electric-vehicle maker launched an offer to sell 75 million shares, even as it forecast second-quarter revenue above analysts’ estimates.
Based on Monday’s close of $20.14 per Rivian share, the company would raise $1.5 billion. Rivian said in a filing that it plans to use the proceeds to fund equity contributions as part of a loan agreement with the U.S. Department of Energy.
The offering comes as Rivian, known for its high-end R1S SUVs and R1T pickups, is ramping up rollout of its smaller, more affordable R2 SUVs, seen as critical for the company’s success.
In April, Rivian said it would obtain a smaller but quicker $4.5 billion loan from the government to fund building and equipping its Georgia plant, which will house expanded production of R2 SUVs. It plans to start drawing the loan early next year.
The offering comes after Rivian reported strong second-quarter deliveries and raised its annual delivery forecast last week. Shares of Rivian have since jumped more than 17%.
The market reaction meant it was “the right time for Rivian to secure additional funding,” a spokesperson told Reuters.
The offering will increase the number of shares outstanding, resulting in dilution for Rivian’s existing shareholders.
Rivian on Monday forecast revenue between $1.55 billion and $1.65 billion for the second quarter, well above analysts’ average estimate of $1.45 billion, according to data compiled by LSEG.
It also estimated $5.3 billion in cash and cash equivalents at the end of June, up from $4.8 billion at the close of the first quarter.
The company is set to report its second-quarter results on July 30.
Reporting by Juby Babu in Mexico City and Abhirup Roy in San Francisco; Editing by Jonathan Ananda and Sherry Jacob-Phillips
