Rivian Stock Drop Hasn't Scared Off This Options Trader
One trader is standing firm on his Rivian bet even after the EV maker's share offering sent the stock into a tailspin.
If you've been watching Rivian lately, you already know the stock has had a rough go of it. The electric vehicle company announced a share offering — the kind of move that typically dilutes existing shareholders and sends a stock tumbling — and sure enough, shares took a hit. For most traders, that kind of pain would trigger a quick exit and a long period of self-reflection.
But not Mike Khouw. The well-known options trader took another look at his Rivian position after the selloff and apparently liked what he saw. Rather than cutting and running, Khouw is sticking with his trade, signaling a level of conviction that stands out in a market where EV stocks have been getting absolutely hammered.
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Share offerings, for the uninitiated, are when a company sells new stock to raise cash. That's not inherently bad — companies need capital to grow, and Rivian is still in an early, cash-hungry phase of scaling up its manufacturing. The downside is that more shares in circulation means each existing share is worth a smaller slice of the pie, which is why these announcements so often spark an immediate selloff.
What makes Khouw's stance interesting isn't just the boldness of it — it's the timing. Rivian and the broader EV sector have faced relentless headwinds, from rising interest rates making growth stocks less attractive to ongoing questions about demand and production costs. Holding through a dilutive offering in that environment takes a pretty specific thesis about where the company is headed.
Whether Khouw's resolve pays off remains to be seen, but it's a reminder that some of the most interesting trades happen when everyone else is heading for the exits. Continue reading at US Top News and Analysis.
