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Rivian Automotive Inc. (NASDAQ:RIVN) is one of the 10 Stocks Investors Are Running Away From.

Rivian Automotive saw its share prices decline by 18.12 percent on Tuesday to close at $16.49 apiece, as investors soured on its plans to sell up to 86.25 million new shares to repay existing debt.

In a statement on Monday, Rivian Automotive Inc. (NASDAQ:RIVN) said that the follow-on offer would involve the primary sale of 75 million common shares and up to 11.25 million in overallotment option for its underwriters.

The R2. Photo from Rivian Automotive

Proceeds from the offer will be used to fund general corporate purposes, including the repayment of its loan with the Department of Energy.

Earlier this year, Rivian Automotive Inc. (NASDAQ:RIVN) was able to draw a $4.5 billion loan from the DOE to help finance construction of its new manufacturing facility in Georgia.

The amount was lower than the $6.57 billion initial loan, which would have supported two phases for a total production capacity of 400,000 units annually. However, the amended loan only covers the first phase of manufacturing with a total capacity of 300,000 vehicles a year.

The expansion initiative supports the recently launched R2 mid-size SUV, which has been rolling off the production line at the company's manufacturing facility in Normal, Illinois. Initial deliveries officially kicked off, with Rivian Automotive Inc. (NASDAQ:RIVN) extending invitation orders for existing R2 reservation holders.

While we acknowledge the potential of RIVN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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