Chinese electric vehicle maker Nio (NYSE:NIO) is raising new funds by offering 60 million American depositary shares (ADS) to back R&D, sales, and service network expansion, as well as general corporate purposes, the company announced in a press release after the close of the US markets on Thursday.
The firm also offered its underwriters Morgan Stanley and China International Capital Corporation Hong Kong Securities an option to purchase up to an additional 9 million ADSs.
Nio didn’t disclose the price of this offering, but based on its current valuation, the company could raise as much as USD 3 billion. Its shares closed at USD 45.22 on Thursday, but fell 6.35 % to USD 42.35 in after-hours trading, following the announcement.
Nio’s shares surged 19-fold in the past twelve months, from the closing price of USD 2.26 on December 11, 2019 to USD 45.22 on Thursday. The company had a turbulent 24 months that included liquidity problems at the end of last year. Nio founder Li Bin said on 36Kr’s WISE New Economy conference on Wednesday that its users saved the company by buying vehicles worth several billions of yuan in the fourth quarter of last year, providing the necessary cash flow.
NIO so far delivered 36,721 vehicles in 2020, representing a year-on-year increase of 111.1%.