Please ensure Javascript is enabled for purposes of website accessibility

NIO Sold More Shares Than Planned, Raising $428 Million

By John Rosevear – Jun 11, 2020 at 10:37AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company's secondary offering appears to have been a success.

Chinese electric-vehicle maker NIO (NIO -3.87%) said that its secondary offering of American depositary shares has been priced at $5.95 per share and that it will offer more shares than it had planned, a sign that demand for the offering was strong.

NIO said on Thursday morning that it increased its offering to 72 million shares, up from 60 million as of yesterday, raising $428.4 million minus the fees due to the banks underwriting the offering. 

Those banks, Morgan Stanley, Credit Suisse, and China International Capital Corporation, now have a 30-day option to purchase an additional 10.8 million American depositary shares, up from 9 million in the company's original offering plan.

A red NIO ES6.

NIO's best-seller so far is the ES6, an upscale electric five-passenger SUV. Image source: NIO.

NIO plans to use the proceeds of the offering to fund a cash investment that it agreed to make in its Chinese business ("NIO China") as part of a financing deal with economic-development authorities in China. 

Those authorities, in China's Anhui province and in Anhui's capital city of Hefei, agreed in April to invest 7 billion Chinese yuan (about $990 million) in exchange for a 24.1% stake in NIO's China-based assets, on the condition that NIO contributed additional cash of its own to the venture. 

"We expect NIO China will use the cash investments for research and development of products, services and technology, development of our manufacturing facilities and roll-out of our supply chain, operation and development of our sales and service network and general business support purpose[s]," the company said in a statement on Wednesday.

NIO's shares fell about 5% on Thursday morning after the news was released. 

John Rosevear has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Nio Inc. Stock Quote
Nio Inc.
NIO
$17.64 (-3.87%) $0.71
Morgan Stanley Stock Quote
Morgan Stanley
MS
$81.51 (-3.85%) $-3.26
Credit Suisse Group AG Stock Quote
Credit Suisse Group AG
CS
$4.14 (-12.10%) $0.57

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.