Nio successfully closes share sale, amassing $1.16 billion in funds
Nio Inc has successfully completed its latest share offering, raising a significant $1.16 billion. The offering included the issuance of 160,823,190 American Depositary Shares (ADSs) and 209,090,918 class A ordinary shares.
The electric vehicle maker did not specify which brands the developed vehicle models would be under, but the proceeds from the offering will be used for research and development, developing future technology platforms and vehicle models, expanding battery swap and charging networks, strengthening the balance sheet, and general corporate purposes.
The rally in Nio's stock following the share issuance may be due to investors' confidence in the offering strengthening the company's balance sheet. This confidence is further evidenced by the underwriters fully exercising their over-allotment option, leading to the issuance of additional 27,272,728 ADSs.
The ES8, Nio's flagship SUV, began pre-sales on August 21 at a competitive price. Deutsche Bank reports that Nio has received about 100,000 cancellable orders for the ES8, a promising sign for the company's future.
Nio's shares have risen for four consecutive trading days following the share issuance, a rare occurrence for a company. This upward trend continued in premarket trading on Wednesday, with Nio shares up 3.85 percent. Yesterday, Nio closed up 8.17 percent in US trading.
The recent capital increase by NIO was strongly supported by institutional investors, with banks fully exercising their overallotment option, indicating strong demand. However, specific institutional names have not been disclosed publicly.
Interestingly, prior to the share offering, Nio had announced plans to issue new shares, which caused its shares to plummet 8.92 percent. However, the successful execution of the offering seems to have reversed this trend.
Looking ahead, Nio will officially launch the third-generation Nio ES8 SUV at Nio Day 2025 this Saturday. The company has announced no additional car issuances planned in the upcoming months beyond this current large offering.
This news underscores the growing confidence in Nio and the electric vehicle market as a whole, as investors continue to show support for innovative companies driving the transition to sustainable mobility solutions.
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