The stock movement of Rivian was noticeably lower than that of several other EV companies today.
Today, stocks in the electric vehicle (EV) industry are moving. Shares of Rivian Automotive (RIVN 2.01%) are included in this. The company’s shares surged over 6% higher and were up 3.5% as of 12:10 p.m. ET.
However, compared to many other equities in the sector, that move was noticeably weaker. The reason for this is that Rivian has announced another capital round.
$15 billion in borrowing
The majority of growth stocks are rising as a result of more broad economic news, which is more closely linked to today’s increase. However, the announcement of a fresh financing strategy by Rivian is what is limiting the rise in the company’s shares.
Regarding its proposed new facility in Georgia, Rivian announced in a filing with the Securities and Exchange Commission (SEC) that it will take on up to $15 billion in debt. A multicounty agency representing the area, where work is scheduled to start early next year, will issue new bonds. As soon as the county agency issues bonds for the project, Rivian will buy them. A rental agreement for the project’s buildings, land, and equipment is also included in the blueprints.
Rivian has pledged to invest $5 billion in the facility, which it claims will employ 7,500 people and generate 400,000 electric vehicles (EVs) yearly. Investors might have been a little taken aback by the new financing arrangement. After all, Rivian’s balance sheet showed almost $9 billion in cash and equivalents at the end of the third quarter.
A speculative purchase
That serves to emphasize how highly speculative investing in the EV manufacturer is. Rivian needs that cash in order to scale up and become even somewhat profitable. In the third quarter, the corporation declared an operating deficit of $1.4 billion.
For the business to be successful, the Georgia site must serve as its flagship factory. There will be the development of Rivian’s next-generation vehicle platform technology. Even on a day when the macro picture is driving stocks upward, the movement in the markets today indicates that investors are cautious because of all the possible difficulties.
Is it currently a good time to invest $1,000 in Rivian Automotive?
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