Rivian Automotive (NASDAQ: RIVN) stock plunged this week and was trading 26% lower through 10 a.m. ET Friday, according to data provided by S&P Global Market Intelligence.

While Rivian's revenue forecast for its third quarter is in line with the estimates, investors are miffed at the money-losing electric vehicle (EV) maker's plans to take on billions of dollars' worth of debt.

In a regulatory filing dated Oct. 4, Rivian announced plans to raise capital by taking on $1.5 billion in debt in the form of senior convertible notes. While investors are always wary of a loss-making company acquiring large amounts of debt, senior convertible notes can also dilute existing shareholders' wealth. That's because these notes are a type of convertible bond that can be converted into equity, meaning their holders can opt to exchange the notes for Rivian shares.

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Source Fool.com