Why Rivian Stock Fell 12% Last Month

Rivian (NASDAQ: RIVN) stock fell 12.3% in July, according to data provided by S&P Global Market Intelligence, after the electric vehicle company announced it sold an additional 75 million shares to raise new capital.

Rivian is ramping up production of its new R2 vehicle, but the company is burning through cash as it tries to gain its footing during a very difficult time for the EV industry.

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Rivian's funding raise has some shareholders concerned

The company sold more than 75 million of new Rivian stock at $15.50 per share last month, which raised about $1.2 billion for the company. There's also the potential for underwriters to purchase an additional 11.25 million shares of common stock.

Rivian said in a press release that the fresh capital would go to general corporate purposes and to equity contributions toward a loan the company has with the U.S. Department of Energy.

But shareholders didn't like two things about the share sale. The first is that issuing the new stock dilutes existing shares. The second thing they really didn't like is the fact that Rivian is spending so much cash that it had to issue new stock in the first place.

Rivian's management said recently that the company's 2026 capital expenditures will be in the range of $1.7 billion to $1.8 billion. The company is ramping up production of its new, lower-priced R2 vehicle. The R2 is widely viewed as a make-or-break vehicle for the company.

Investors across many sectors are increasingly skeptical that all the spending companies are doing will eventually translate into profits. For Rivian, the difficulties are compounded by the fact that U.S. consumers have shifted more toward hybrid vehicles and away from EVs.

It's not all bad news for Rivian

While the new stock sale wasn't great to see, Rivian is making some progress. The company's delivery guidance of 65,000 to 70,000 vehicles for 2026 is up from 42,247 deliveries in 2025.

And while capex remains high, management lowered the full-year spending guidance by $250 million at the midpoint, compared to its previous guidance, "due to project efficiencies and timing of spend."

Rivian also reported a gross profit of $179 million in the second quarter, compared to a loss of $206 million in the year-ago quarter.

Still, the company has a long road ahead of it as it tries to ramp up purchases of its new R2 model and convince more buyers that electric vehicles are worth the cost.

Chris Neiger has positions in Rivian Automotive. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.