Nio’s stock traded 5.55% lower at $42.71 in premarket on Friday after it announced on Thursday evening an offering of 60 million ADSs of Class A ordinary shares, according to Benzinga. The offering was valued at $2.71 billion from Thursday’s closing price of $45.22. The company also provided an additional 9 million ADSs for underwriters to cover allotment.
- Nio plans to use the net proceeds from offering for research and development of new products, next-generation autonomous driving technologies, sales and service network expansion, market penetrations, and general corporate purposes.
- The company has planned a European expansion and is working on an in-house self-driving chip.
- Nio intends to launch two sedans in 2021, with the first likely to be announced at the Nio Day event scheduled for January.
- The company is planning to increase the number of Nio Houses and Spaces and its battery-swapping stations.
- Nio largely relied on debt offerings for its capital needs for most of 2019 and in early 2020, when its stock was trading at depressed levels.
- In September 2018, Nio raised $1 billion by selling 160 million ADSs at $6.26 each, while in June, it priced a 72-million-ADS offering at $5.95, raising $428.4 million in gross proceeds.
- In late August, Nio raised $1.51 billion by offering 88.5 million ADSs at $17 each.
- Most electric vehicle makers have used the equity route for financing based on a strong rally in shares, and the companies’ huge funds needed to stay relevant in a capital-intensive and consumer discretionary industry.
- Nio’s ADSs have gained about 1,025% year to date on strong deliveries during the COVID-19 downturn and company efforts to improve technology, costs, and services.
Nio stock is currently declining. NIO: NYSE is down 5.68% on premarket.
