Rivian Just Did What Investors Despised Lucid for. How Bad Is It?

When investors are considering young electrical conveyance (EV) stocks, Rivian Automotive (NASDAQ: RIVN) and Lucid Group (NASDAQ: LCID) often popular up. Both Rivian and Lucid person proved susceptible of processing compelling vehicles, albeit astatine lofty prices initially, and they person precocious EV exertion and software.

More recently, Rivian achieved its archetypal full-year gross nett successful 2025, portion Lucid has struggled to amended its portion economics, further separating the 2 successful favour of Rivian. That said, Rivian conscionable did thing that Lucid investors groan about: raising superior and diluting shareholders. Does this alteration however investors should presumption the two?

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History shows the inclination

A small Investing 101: Shareholder dilution is simply the alteration successful a shareholder's existing ownership percent owed to a institution issuing caller shares of banal for raising superior and worker compensation, among different factors. You tin reason that investors are OK with immoderate dilution due to the fact that successful theory, the institution present has much superior to prosecute growth, which successful crook improves its concern potential.

The drawbacks are little net per stock and reduced voting power. That's important to remember, due to the fact that shareholder dilution mightiness person made immoderate Rivian investors cringe precocious erstwhile it announced a nationalist offering of 75 cardinal shares of communal stock, worthy astir $1.5 billion. This added superior comes astatine a cost, which works retired to astir 6% dilution.

The bully quality for Rivian investors is that the young EV shaper has been reserved astir raising superior and diluting shareholders. That's chiefly due to the fact that of its ample archetypal nationalist offering's currency cushion, and aboriginal superior injections from associated ventures specified arsenic 1 with Volkswagen – besides a driving unit down Rivian's full-year gross nett – and a $6.6 cardinal indebtedness installation from the U.S. Department of Energy.

In the graph below, you tin amended spot the longer-term inclination betwixt Rivian and Lucid.

The graph supra was chopped disconnected astatine the opening of 2025 due to the fact that soon thereafter, Lucid performed a 1-for-10 reverse banal split, drastically shrinking its stock number and perchance misleading investors who don't relationship for that (the graph could not).

A antithetic mode to look astatine it is to instrumentality Lucid's reported 1.644 cardinal shares outstanding aft its nationalist debut via a merger with a peculiar intent acquisition company. Adjusted for the split, that equates to a existent fig of 164.4 cardinal shares, compared to its existent full of outstanding shares of astir 390.26 million, giving america a full accrued stock number of astir 137%. In comparison, Rivian's beingness share-count summation sits astatine astir 58%, including the caller July offering.