Jim Cramer expressed concerns about Rivian Automotive Inc RIVN after the EV company announced a new $1.5 billion offering.
What To Know: Rivian on Thursday said it intends to offer an aggregate of $1.5 billion of green convertible senior notes in a private offering to institutional buyers. The company plans to use net proceeds to invest in current and future projects.
Thursday morning on CNBC's "Squawk On The Street," Cramer started to compare the company to Tesla Inc TSLA before retracting his comments.
"Could this be a Musk situation where people just say, 'You know what, I'm willing to hold my nose and buy that because [RJ Scaringe] may be the next...' Well no one's the next Elon Musk, I don't want to do that," Cramer spewed.
He noted that he was almost a little too generous with his characterization of what's going on at Rivian, and then continued.
"There's definitely a love for their product ... but look, there's been a lot of love for a lot of different car companies that have failed," he said.
Related Link: First Rivian, Now Nio: EV Makers Are Lighting Money On Fire To Compete
Tesla raised a lot of capital on the path to becoming profitable — it took 17 years. Cramer pointed out that the stock didn't react the way Rivian shares are reacting to the news Thursday.
"I happen to think that management here is very good, but I am very worried that when you do a convertible like that and the stock goes down like this, it means there's less faith than there was in Elon Musk and Tesla after year two," Cramer said.
Rivian shares were down more than 22% at the last check and are now on the verge of turning negative for the year. The company went public in late 2021 and reached an all-time high closing price of $172.01 shortly after. The stock has largely trended lower since the company's public debut.
Photo: Shutterstock and Rivian
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