Shares of Rivian Automotive fell sharply on Thursday, after the company surprised investors with a plan to offer $1.5 billion in convertible notes.
It also provided a preliminary estimate of its third-quarter revenue that was in line with Wall Street estimates.
Shares closed down over 22% on Thursday.
In a regulatory filing late Wednesday, Rivian said it expects its third-quarter revenue to come in between $1.29 billion and $1.33 billion, roughly in line with Wall Street estimates of $1.3 billion, according to LSEG, formerly known as Refinitiv.
Rivian also estimated that it had cash and equivalents of $9.1 billion as of Sep. 30, down from $10.2 billion at the end of the second quarter.
Rivian took steps earlier this year to slow spending and bolster its balance sheet, including a 6% staff reduction in February and a $1.3 billion sale of convertible notes in March. The company also delayed the launch of its upcoming smaller R2 vehicle platform to 2026, from 2025. But news of the latest offering came as a surprise to investors.
Rivian plans to offer $1.5 billion worth of senior, unsecured "green" convertible notes due in 2030. Buyers will have the option to purchase up to an additional $225 million worth of notes, the company said.
Rivian on Monday reported third-quarter deliveries that were better than Wall Street had expected. The EV maker will report its third-quarter earnings after the U.S. markets close Nov. 7.
