Nio‘s US-listed shares plunged on Wednesday’s pre-market trading session by 8.60% to $5.75 after the EV maker announced an offering of up to 181,818,190 shares.
The offering follows a 40.5% surge in Nio’s shares over the past month and a nearly 65% gain in the last three months, fueled by strong demand for its newly launched SUVs and an all time delivery record reported on September 1.
Additionally, the $1.1 billion capital raise comes a week after management set its fourth quarter goal of selling 50,000 vehicles a month across Nio, Firefly and Onvo. The current record, set last month, is about 31,300.
Last week, the company reported loss from operations in the second quarter at 4.91 billion yuan ($685 million), down 5.8% from the same period a year earlier and 23.5% lower than the first quarter.
On an adjusted basis that strips out share-based compensation and organizational optimization charges, operating loss narrowed to 4.04 billion yuan ($564 million), a 14% year-on-year decline and a 32.1% sequential drop.
Net loss stood at 4.99 billion yuan ($697 million), almost flat versus a year earlier but 26% lower than the first quarter.
The company founded and led by William Li said the proceeds of the new offering will be used for R&D, to expand the battery swap network and to “further strengthen its balance sheet.”
“The Company currently plans to use the net proceeds from the Equity Offering to invest in the research and development of core technologies for smart electric vehicles, develop future technology platforms and vehicle models across its brands, expand its battery swapping and charging network, further strengthen its balance sheet, and for general corporate purposes,” Nio said.
As the US-listed shares of the EV maker closed at $6.28 on Tuesday, Nio’s planned equity sale would generate about $1.1 billion in proceeds.
If underwriters take up their full 30-day option, the deal could bring in roughly $170 million more.
The transaction will include both American depositary shares (ADS), each representing one ordinary share, and direct offerings of Class A shares in Hong Kong and Singapore, the company said.
Nio added it has also granted underwriters a 30-day option to purchase up to an additional 27.3 million ADSs, which would be settled solely in ADSs if exercised.
“The Company intends to grant the underwriters in the Equity Offering a 30-day option to purchase up to an additional 27,272,729 ADSs, which, if exercised, will be settled solely in ADSs,” the filing reads.
Singapore-listed shares were suspended earlier this Wednesday pending the release of an announcement leading to a 5% decline on the US-listed shares during the first minutes of the pre-market session.
The request for suspension came from Chief Financial Officer Stanley Qu.
