If there is one thing that investors really hate, it is dilution. When a company sells new stock, the price of every share of stock typically falls.

Rivian Automotive Inc. (NASDAQ: RIVN) has not issued new stock yet, but that is the effect the company’s announced issue of $1.5 billion in new convertible notes will have on existing shareholders. The notes are senior, unsecured obligations of the company and will mature on October 15, 2030. Interest on the notes will be paid semi-annually. The company did not reveal pricing for the notes.

Here is the part shareholders hate even more: noteholders can convert the notes to cash or common stock or both. In certain circumstances, “noteholders may require Rivian to repurchase their notes for cash. The repurchase price will be equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.” Shareholders have no such right. If a company goes down, shareholders are wiped out.

That is bad enough. In a document accompanying the federal filing, Rivian revealed that it had burned through $1.1 billion in the third quarter, leaving the company with $9.1 billion. That is enough to fund operations through 2025. Over the next nine quarters, then, $9.1 billion will not be enough if ‌cash burn remains at $1.1 billion per quarter. The $1.5 billion in convertible notes provides a cushion and implies not only a continuing cash burn but that future revenue is not likely to make up the difference. (These are America’s 17 favorite pickups.)

That is the third whammy for Rivian stock. In the same filing document, Rivian estimated that it will report $1.29 to 1.33 billion in revenue for the third quarter when it releases numbers on November 7. The consensus forecast called for revenue of $1.3 billion and a loss per share of $1.31. That pencils out to a net loss of around $720 million, based on just over 948 million shares of Rivian stock outstanding. Stock-based compensation costs and depreciation and amortization costs are likely to add another $400 million to the net loss, bringing the total cash burn to around $1.1 billion again.

Rivian lost nearly $33,000 for every vehicle it sold in the second quarter of this year. The company reported third-quarter deliveries of 15,564 units earlier this week, up 16.5% quarter over quarter.

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Tesla Inc. (NASDAQ: TSLA) shipped 435,059 vehicles in the third quarter, down 6.7% sequentially but up 18.9% year over year. Tesla is having some issues with profitability as well. The company’s gross margin in the second quarter was 18.2%, lower than an expected margin of 18.8%. Estimates for the third quarter have settled right around 18.1%. And that is with sharp price cuts to make more of the company’s vehicles at prices that qualify buyers for federal incentives.

Rivian’s cheapest vehicle has a sticker price of $84,000. Cutting that price to below $50,000, as Tesla has done with its best-selling Model 3 sedan and Model Y SUV, is not an option for Rivian. That would only increase the already huge loss per vehicle, and the company would not have a chance of surviving for another nine quarters on the cash it has and plans to raise in the new notes offering.

Rivian stock traded down by about 20% at $19.09 in the noon hour Thursday. The stock’s 52-week trading range is $11.68 to $37.39.

Tesla shares traded down by about 0.6%, at $259.62 in a 52-week range of $101.81 to $299.29.

Also check out: 13 Biggest Electric Vehicle Business Failures in American History

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