{"id":69086,"date":"2023-10-05T13:22:18","date_gmt":"2023-10-05T17:22:18","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/rivian-stock-falls-on-double-disappointment-time-to-worry\/"},"modified":"2023-10-05T13:22:21","modified_gmt":"2023-10-05T17:22:21","slug":"rivian-stock-falls-on-double-disappointment-time-to-worry","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=69086","title":{"rendered":"Rivian Stock Falls on Double Disappointment. Time to Worry?"},"content":{"rendered":"
\n
<\/p>\n

<\/p>\n

<\/p>\n<\/figure><\/div>\n

\n Rivian Automotive
\n stock was falling on Thursday after it gave disappointing guidance and announced plans to raise more funds. But investors don\u2019t really have to lose sleep, not over the news, at least.<\/p>\n

On Wednesday after the market closed, Rivian said that sales in the current quarter would be slightly lower than analysts estimated. It also said it would issue $1.5 billion in convertible notes. <\/p>\n

\n

Rivian (ticker: RIVN) was off 19.4% around 11:45 a.m. Eastern on Thursday, while the
\n S&P 500
\n and
\n Nasdaq Composite
\n were down 0.7% and 0.8%, respectively. The disappointing guidance comes just days after the company said it delivered more units than expected in the third quarter.\u00a0<\/p>\n

Stocks often drop after convertible sales are announced. There are a couple of reasons for that. For starters, convertible notes are debt that can be turned into shares, which has the potential to dilute the holdings of current owners. Some investors will also go short stock of the convertible notes, borrowing shares they don\u2019t own and selling them. Any selling pressure can drive down the price of any shares. <\/p>\n

Short selling is typically a bearish bet. But in the case of convertible notes offerings, it\u2019s a hedge that can, essentially, lock in a bondlike return. If the convertible notes become stock then the noteholders can use those shares to cover their short position, collecting bond interest along the way. If the notes don\u2019t convert then the stock didn\u2019t go up. The short position made money offsetting any losses on the convertible notes. <\/p>\n

Along with the notes offering, Rivian announced third-quarter sales would be roughly $1.31 billion. Wall Street was looking for about $1.38 billion. It\u2019s a miss, but not a big one. Deliveries for the third quarter were better than expected so the price realized on each sale was a little worse than expected. Prices for EVs have been falling in the U.S. thanks to price cuts at
\n Tesla
\n (TSLA) and
\n Ford Motor
\n (F). <\/p>\n

Rivian\u2019s vehicles are tempting for American buyers of electric-powered pickup trucks that handle like sports cars. But they sell at about $80,000 on average, and developing them is expensive. The company is burning through cash\u2013it sold trucks at an average loss of $33,000 in the second quarter.\u00a0<\/p>\n

That is a big number, but it isn\u2019t surprising either. The car business is about scale. Most car makers have to deliver hundreds of thousands of cars to make money. Rivian is delivering tens of thousands. What\u2019s more, car makers expense all the platform development as it\u2019s incurred.
\n Ford Motor
\n (F), for instance, lost about $1.8 billion in the first half of 2023 selling electric vehicles. It sold about 47,000 units giving the company a per-car loss of roughly $38,000. <\/p>\n

It isn\u2019t that bad, explains Benchmark analyst Mike Ward. Ford is spending billions on R&D. Ward estimates that the EVs are profitable at the gross profit margin line of the profit and loss statement. Ford doesn\u2019t report gross profits by division. <\/p>\n

Rivian\u2019s stock has seen some big swings. Coming into Thursday trading it was up more than 25% since Jan. 1, but is still 36% lower than 12 months ago. It has burned through about half of its $18 billion cash pile. Shares are down some 70% since it raised $12 billion in a 2021 initial public offering.\u00a0<\/p>\n

The challenge for Rivian now is to reduce costs and streamline production. The company says that the current losses are necessary to get the company growing. It plans to generate positive gross profits on its vehicles in 2024. <\/p>\n

Wall Street projects positive gross profits by the third quarter of 2024\u2013and positive net income around 2028, according to FactSet. <\/p>\n

Write to Brian Swint at brian.swint@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Rivian Automotive stock was falling on Thursday after it gave disappointing guidance and announced plans to raise more funds. But investors don\u2019t really have to lose sleep, not over the news, at least. On Wednesday after the market closed, Rivian said that sales in the current quarter would be slightly lower than analysts estimated. It […]<\/p>\n","protected":false},"author":1,"featured_media":69087,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-69086","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nRivian Stock Falls on Double Disappointment. Time to Worry? | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Rivian Automotive stock was falling on Thursday after it gave disappointing guidance and announced plans to raise more funds. But investors don\u2019t really\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=69086\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Rivian Stock Falls on Double Disappointment. Time to Worry? | iFintechWorld\" \/>\n<meta property=\"og:description\" content=\"Rivian Automotive stock was falling on Thursday after it gave disappointing guidance and announced plans to raise more funds. But investors don\u2019t really\" \/>\n<meta property=\"og:url\" content=\"https:\/\/ifintechworld.com\/?p=69086\" \/>\n<meta property=\"og:site_name\" content=\"iFintechWorld\" \/>\n<meta property=\"article:published_time\" content=\"2023-10-05T17:22:18+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-10-05T17:22:21+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/10\/1696526540_social.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"640\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"News Room\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"News Room\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/ifintechworld.com\/?p=69086#article\",\"isPartOf\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=69086\"},\"author\":{\"name\":\"News Room\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61\"},\"headline\":\"Rivian Stock Falls on Double Disappointment. Time to Worry?\",\"datePublished\":\"2023-10-05T17:22:18+00:00\",\"dateModified\":\"2023-10-05T17:22:21+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=69086\"},\"wordCount\":626,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/ifintechworld.com\/#organization\"},\"keywords\":[\"Featured\"],\"articleSection\":[\"Markets\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/ifintechworld.com\/?p=69086#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/ifintechworld.com\/?p=69086\",\"url\":\"https:\/\/ifintechworld.com\/?p=69086\",\"name\":\"Rivian Stock Falls on Double Disappointment. Time to Worry? | iFintechWorld\",\"isPartOf\":{\"@id\":\"https:\/\/ifintechworld.com\/#website\"},\"datePublished\":\"2023-10-05T17:22:18+00:00\",\"dateModified\":\"2023-10-05T17:22:21+00:00\",\"description\":\"Rivian Automotive stock was falling on Thursday after it gave disappointing guidance and announced plans to raise more funds. But investors don\u2019t really\",\"breadcrumb\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=69086#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/ifintechworld.com\/?p=69086\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/ifintechworld.com\/?p=69086#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/ifintechworld.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Rivian Stock Falls on Double Disappointment. Time to Worry?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/ifintechworld.com\/#website\",\"url\":\"https:\/\/ifintechworld.com\/\",\"name\":\"Repay Down\",\"description\":\"Latest Personal Finance News, Tips and Updates\",\"publisher\":{\"@id\":\"https:\/\/ifintechworld.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/ifintechworld.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/ifintechworld.com\/#organization\",\"name\":\"Repay Down\",\"url\":\"https:\/\/ifintechworld.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png\",\"contentUrl\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png\",\"width\":558,\"height\":90,\"caption\":\"Repay Down\"},\"image\":{\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61\",\"name\":\"News Room\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png\",\"contentUrl\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png\",\"caption\":\"News Room\"},\"sameAs\":[\"https:\/\/ifintechworld.com\"],\"url\":\"https:\/\/ifintechworld.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Rivian Stock Falls on Double Disappointment. Time to Worry? | iFintechWorld","description":"Rivian Automotive stock was falling on Thursday after it gave disappointing guidance and announced plans to raise more funds. But investors don\u2019t really","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/ifintechworld.com\/?p=69086","og_locale":"en_US","og_type":"article","og_title":"Rivian Stock Falls on Double Disappointment. Time to Worry? | iFintechWorld","og_description":"Rivian Automotive stock was falling on Thursday after it gave disappointing guidance and announced plans to raise more funds. But investors don\u2019t really","og_url":"https:\/\/ifintechworld.com\/?p=69086","og_site_name":"iFintechWorld","article_published_time":"2023-10-05T17:22:18+00:00","article_modified_time":"2023-10-05T17:22:21+00:00","og_image":[{"width":1280,"height":640,"url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/10\/1696526540_social.jpeg","type":"image\/jpeg"}],"author":"News Room","twitter_card":"summary_large_image","twitter_misc":{"Written by":"News Room","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/ifintechworld.com\/?p=69086#article","isPartOf":{"@id":"https:\/\/ifintechworld.com\/?p=69086"},"author":{"name":"News Room","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61"},"headline":"Rivian Stock Falls on Double Disappointment. Time to Worry?","datePublished":"2023-10-05T17:22:18+00:00","dateModified":"2023-10-05T17:22:21+00:00","mainEntityOfPage":{"@id":"https:\/\/ifintechworld.com\/?p=69086"},"wordCount":626,"commentCount":0,"publisher":{"@id":"https:\/\/ifintechworld.com\/#organization"},"keywords":["Featured"],"articleSection":["Markets"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/ifintechworld.com\/?p=69086#respond"]}]},{"@type":"WebPage","@id":"https:\/\/ifintechworld.com\/?p=69086","url":"https:\/\/ifintechworld.com\/?p=69086","name":"Rivian Stock Falls on Double Disappointment. Time to Worry? | iFintechWorld","isPartOf":{"@id":"https:\/\/ifintechworld.com\/#website"},"datePublished":"2023-10-05T17:22:18+00:00","dateModified":"2023-10-05T17:22:21+00:00","description":"Rivian Automotive stock was falling on Thursday after it gave disappointing guidance and announced plans to raise more funds. But investors don\u2019t really","breadcrumb":{"@id":"https:\/\/ifintechworld.com\/?p=69086#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/ifintechworld.com\/?p=69086"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/ifintechworld.com\/?p=69086#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/ifintechworld.com\/"},{"@type":"ListItem","position":2,"name":"Rivian Stock Falls on Double Disappointment. Time to Worry?"}]},{"@type":"WebSite","@id":"https:\/\/ifintechworld.com\/#website","url":"https:\/\/ifintechworld.com\/","name":"Repay Down","description":"Latest Personal Finance News, Tips and Updates","publisher":{"@id":"https:\/\/ifintechworld.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/ifintechworld.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/ifintechworld.com\/#organization","name":"Repay Down","url":"https:\/\/ifintechworld.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/","url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png","contentUrl":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png","width":558,"height":90,"caption":"Repay Down"},"image":{"@id":"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61","name":"News Room","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/image\/","url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png","contentUrl":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png","caption":"News Room"},"sameAs":["https:\/\/ifintechworld.com"],"url":"https:\/\/ifintechworld.com\/?author=1"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/69086","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=69086"}],"version-history":[{"count":1,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/69086\/revisions"}],"predecessor-version":[{"id":69088,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/69086\/revisions\/69088"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/media\/69087"}],"wp:attachment":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=69086"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=69086"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=69086"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}