Shares of Rivian Automotive (RIVN) are down about 10% after the electric truck maker lowered its forward guidance and announced plans to raise more cash.
Specifically, Rivian said that sales in the current fourth quarter of the year are likely to be lower than analysts’ forecasts.
At the same time, Rivian said that it plans to issue $1.5 billion U.S. in convertible notes, which is debt that can be converted into stock. The move will dilute the holdings of current shareholders.
Rivian’s electric pick-up trucks sell at an average price of $80,000 U.S., putting them out of reach for many consumers.
The trucks are also expensive to produce. Rivian has said that it is burning through cash due to high production costs and weakening sales. The company sold trucks at an average loss of $33,000 U.S. in this year’s second quarter.
Rivian said it has gone burned through about half of its $18 billion U.S. cash pile in recent months.
Management has said that they are focused on lowering costs and streamlining production. The company has maintained its goal to become profitable in 2024.
Rivian’s stock has declined 34% in the past 12 months and trades at $23.69 U.S. per share.
