What happened
Shares of Chinese electric-vehicle maker NIO (NIO 11.65%) were modestly higher on Tuesday. A Wall Street analyst shared bullish comments on the company after it said that it had closed a $1.5 billion convertible-bond offering.
As of 2 p.m. EST, NIO's American depositary shares were up about 3% from Friday's closing price.
So what
There were two pieces of interesting news for NIO investors on Tuesday morning.
First, the company said that its offering of $1.5 billion in convertible notes has closed. The notes are in two series, each with principal value of $750 million: one matures in 2026 and pays no interest; the other pays 0.50% per year and will mature in 2027. Notes in both series can be converted to NIO American depositary shares at a price of $93.06.
That's a good deal for NIO, and it confirms that interest in the company remains extremely high among institutional investors.
Separately, NIO said that about $582 million of its previously issued 4.5% notes, originally due in 2024, have now been converted to stock.
NIO CEO William Bin Li presented the company's new ET7 electric sedan earlier this month. Image source: NIO.
Second, Jefferies analyst Alexious Lee initiated coverage of NIO with a hold rating and a price target of $60. Lee said that NIO is "China's icon for luxury BEVs" and auto investors' expectations are high following its successful NIO Day event earlier this month; but he sees revenue for 2021 and 2022 coming in about 10% behind Wall Street consensus as he believes electric-vehicle adoption will progress more slowly than expected.
Now what
Investors can look forward to hearing more about the company's expectations for 2021 from CEO William Bin Li during the company's fourth-quarter and full-year 2020 earnings report, likely in mid-February.
