The Chinese electric carmaker Nio is seeking to raise up to $3.1 billion from the sale of up to 69 million American depositary shares to investors. It’s commenced an offering of 60 million share units, with a 30-day over-allotment option to sell an extra 9 million shares, wherein each share will be sold for its current share price of about $45. 

Nio says it’ll use the proceeds from the share sale to fund research & development as well as the expansion of its sales network. The company seems to be taking advantage of increasing positive investor sentiment for electric carmakers, wherein its stock has risen well over 100% this year, now with a record market value of nearly $62 billion.

Nio’s sales have grown rapidly over the year, with the electric carmaker having delivered 12,206 vehicles in the third quarter ended September 2020, compared to 4,799 in the same quarter last year. The company posted $628 million in sales in the quarter, up 146% year-over-year.

Nio’s sales growth has been driven by big expansion investments that’s led it to record significant losses. In the third quarter of this year, it posted a net loss of $175 million, down 53.5% year-over-year. Basically, the company is spending big to expand its business, with hopes of becoming profitable in the long run.

Nio’s new share sale would nearly double its cash balance if completed, given that it reported having $3.3 billion in cash as of the end of this September. With an extra $3.1 billion, the company’s cash balance would increase to $6.4 billion, ample cash to fund its sales expansion and R&D.

Nio’s share sale comes just on the heels of another Chinese electric carmaker, Xpeng, commencing a share sale of up to $2.5 billion, and also, the American electric carmaker Tesla commencing a $5 billion share sale.

Photo credit: Nio

Share this...

Facebook

Pinterest

Twitter

Linkedin

Whatsapp

Email

Print