Rivian Automotive (Rivian (RIVN)) shares took a hit on Tuesday after the company announced a public offering of 75 million shares of Class A common stock. The move, which could raise roughly $1.7 billion, overshadowed some pretty good news from last week about deliveries and production.

The offering includes an underwriters' option to buy up to an additional 11.25 million shares within 30 days. Based on Monday's closing price of $20.14, selling all 86.25 million shares would bring in about $1.74 billion. That's a lot of cash, but it comes at a cost: dilution for existing shareholders.

Rivian says it plans to use the net proceeds for general corporate purposes, including funding certain equity contributions under an amended loan agreement with the U.S. Department of Energy. The company ended the first quarter with about $4.83 billion in cash and short-term investments, so this isn't a desperate move—but it does signal that Rivian is still burning through cash as it ramps up production.

Q2 Deliveries Beat Expectations

The offering comes just days after Rivian reported its second-quarter production and delivery numbers, which were actually pretty solid. The company produced 12,613 vehicles and delivered 12,194 units at its Normal, Illinois plant for the quarter ending June 30. That beat its own guidance of 9,000 to 11,000 deliveries, helped by growth in its EDV and R1 vehicles and the start of R2 deliveries.

As a result, Rivian raised its full-year 2026 delivery guidance from 62,000-67,000 vehicles to 65,000-70,000 vehicles. That's a nice vote of confidence in the company's trajectory.

Earnings on the Horizon

Rivian is scheduled to report its official second-quarter financial results after the market close on July 30. Wall Street analysts are expecting a loss per share of 79 cents on quarterly revenue of $1.44 billion. The stock offering adds a layer of uncertainty to those numbers, as investors will be watching closely for any updates on cash burn and the impact of dilution.

Short Interest Ticks Up

Before the offering announcement, short interest in Rivian had risen from 144.87 million to 150.29 million shares in the latest reporting period. That's about 14.59% of the company's float, with a days-to-cover ratio of 4.48 days based on average daily volume of 33.55 million shares. So there's already a fair amount of bearish sentiment out there.

Price Action

Rivian shares were down 8.39% in premarket trading Tuesday, hitting $18.45. The offering price hasn't been disclosed yet, but it's likely to be at a discount to the market, which explains the drop. For now, investors are weighing the dilution against the potential for Rivian to use the cash to fuel growth and meet its DOE obligations.