What In The World Is Going On With Rivian Stock?

Rivian Automotive Inc RIVN shares are trading sharply lower by 9.7% to $17.98 Wednesday afternoon amid weakness in EV stocks, and despite a lack of company-specific news for the session. A rise in Treasury yields has also weighed on growth stocks during Wednesday's session.

Rivian stock has fallen roughly 24% in October after the company priced its previously announced $1.5 billion green convertible senior notes offerings.

Why Rivian Has Seen Weakness In October

This month's issuance of convertible senior notes adds to Rivian's debt obligations. This increased debt load can raise concerns among investors, especially if they believe the company may struggle to service its debt or if it impacts the company's creditworthiness.

Higher debt levels can also lead to higher interest expenses, reducing profitability.

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What Investors Should Know

The notes offered by Rivian are senior, unsecured obligations with an annual interest rate of 3.625%. Interest payments occur twice a year on April 15 and October 15, starting in 2024. The notes will mature on October 15, 2030, but can be converted earlier under specific conditions before July 15, 2030. After this date, noteholders can convert at their discretion until shortly before the maturity date.

Conversion can result in cash, shares of Rivian's common stock, or a combination of both, with an initial conversion rate of 42.9290 shares per $1,000 note principal, equivalent to approximately $23.29 per share.

This initial conversion price offers a 27.5% premium over Rivian's common stock price on October 5, 2023, and may be adjusted in response to certain events.

Rivian says the company plans to use the proceeds from this offering for various environmentally friendly projects, in line with Green Bond Principles, 2021.

According to data from Benzinga Pro, Rivian has a 52-week high of $36.45 and a 52-week low of $11.68.