{"id":69899,"date":"2023-10-07T12:15:26","date_gmt":"2023-10-07T16:15:26","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/rivians-stock-bounces-back-into-the-green-in-wake-of-convertible-debt-pricing\/"},"modified":"2023-10-07T12:15:30","modified_gmt":"2023-10-07T16:15:30","slug":"rivians-stock-bounces-back-into-the-green-in-wake-of-convertible-debt-pricing","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=69899","title":{"rendered":"Rivian\u2019s stock bounces back into the green in wake of convertible debt pricing"},"content":{"rendered":"
\n

Shares of Rivian Automotive Inc. have roller-coastered back into the green Friday\u2019s, a day after suffering a record selloff, in the wake of the pricing of the electric vehicle maker\u2019s $1.5 billion convertible debt offering.<\/p>\n

The stock
\n RIVN,
\n +3.56%<\/bg-quote>
\n had plummeted 22.9% on Thursday, the biggest one-day decline since it went public in November 2021, in reaction to the EV maker\u2019s convertible capital raise and third-quarter sales outlook.<\/p>\n

\n

But after the pricing was announced late Thursday, Rivian\u2019s stock rose as much as 2% soon after the start of the premarket session at 4 a.m. Eastern, before reversing to a loss of as much as 4.8% about 30-minutes before the opening bell.<\/p>\n

The stock has battled back into the green since the open, and was last up 0.1% in morning trading.<\/p>\n

<\/p>\n

<\/p>\n

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

The company said late Thursday that the $1.5 billion \u201cgreen\u201d convertible senior notes due 2030 will accrue interest at a rate of 3.625%.<\/p>\n

The rate is a whole percentage point lower than the company\u2019s last offering, as the $1.3 billion \u201cgreen\u201d convertible debt offering in March priced at a rate of 4.625%.<\/p>\n

Over the same time, the yield on the 10-year Treasury note
\n BX:TMUBMUSD10Y
\n increased by about 0.74 percentage points through Thursday.<\/p>\n

Meanwhile, the initial conversion rate for the latest offering represented an initial conversion price of $23.29, a 27.5% premium over Thursday\u2019s closing price of $18.27. For the March offering, the initial conversion price of $20.13 represented a 37.5% premium.<\/p>\n

The stock had rallied 24.8% since the last offering.<\/p>\n

The latest offering can be converted at any time, from and after July 15, 2030, to common stock, cash or a combination of stock and cash, while the March offering could be converted at any time after Dec. 15, 2028. Basically, the initial conversion rate of the latest offering implies a 15.7% gain in the stock in the 19 months between the offerings\u2019 conversion periods.<\/p>\n

Truist analyst Jordan Levy reiterated his buy rating in a note published before the latest offering priced. His $30 stock price target implies a 64% upside to Thursday\u2019s closing price.<\/p>\n

Levy said the latest offering \u201clargely falls in line with expectations,\u201d and represents Rivian\u2019s strategy of continued \u201copportunistic\u201d capital raises, as the announced after Wednesday\u2019s close came after the stock ran up 9.2% on the day.<\/p>\n

Although a selloff in the stock post-offering was expected, Levy believes that with \u201cmost of the unknowns out of the way,\u201d he sees an \u201cincreasingly positive setup\u201d into Rivian\u2019s third-quarter results, which are expected in early November.<\/p>\n

The stock has lost 15.4% over the past three months, while EV giant Tesla Inc.\u2019s stock
\n TSLA,
\n +0.18%<\/bg-quote>
\n has lost 8.3% and the S&P 500 index
\n SPX
\n has slipped 3.4%.<\/p>\n<\/p><\/div>\n<\/div>\n

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

Shares of Rivian Automotive Inc. have roller-coastered back into the green Friday\u2019s, a day after suffering a record selloff, in the wake of the pricing of the electric vehicle maker\u2019s $1.5 billion convertible debt offering. The stock RIVN, +3.56% had plummeted 22.9% on Thursday, the biggest one-day decline since it went public in November 2021, […]<\/p>\n","protected":false},"author":1,"featured_media":69900,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-69899","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nRivian\u2019s stock bounces back into the green in wake of convertible debt pricing | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Shares of Rivian Automotive Inc. have roller-coastered back into the green Friday\u2019s, a day after suffering a record selloff, in the wake of the pricing of\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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