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Jim Cramer Voices Concerns Over Rivian’s $1.5 Billion Offering

The stock plunges as investors question faith in Rivian's future amidst convertible note announcement.

Jim Cramer expressed concerns about Rivian Automotive Inc (NASDAQ: RIVN) after the EV company announced a new $1.5 billion offering. 

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.

People look at Rivian electric trucks at the auto maker’s newly opened storefront in the Meatpacking District of Manhattan on June 23, 2023 in New York City. Jim Cramer expressed concern about Rivian’s stock. (SPENCER PLATT/GETTY IMAGES) 

Thursday morning on CNBC’s “Squawk On The Street,” Cramer started to compare the company to Tesla Inc (NASDAQ: 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. 

Rivian currently has two models which are the R1S (SUV) and the R1T (Truck). The company had received investments from both Ford and Amazon.

The Rivian R1T is one of three EV trucks that is currently being sold in the automotive market that include’s Ford’s F-150 Lightning and GM’s GMC Hummer Truck.

The Chevrolet Silverado EV, Tesla Cyber Truck, and the GMC Sierra EV are expected to hit the car lots in 2024.

Amazon had ordered EV vans from Rivian, which the automotive company had built these vans catered to the e-commerce giant.

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. 

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. 


Produced in association with Benzinga

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