NIO stock spikes after EV maker scores massive $2.2B investment

Chinese language EV maker NIO (NIO) is trending after receiving $2.2 billion in funding from Abu-Dhabi’s CYVN Holdings. NIO’s inventory is up over 5% Monday following the funding.

NIO inventory climbs after $2.2 billion funding

With the new investment, CYVN will grow to be a significant NIO shareholder. The Abu Dhabi-backed funding firm is investing $2.2 billion by subscribing to 294 million newly issued shares. The share repurchase worth is $7.50, in accordance with the press launch.

The information comes after NIO acquired nearly $740 million from CYVN in July. After the transaction is full, CYVN will personal 20.1% of the corporate, up from 7%.

The transaction is anticipated to shut the final week of December. Upon closing, CYVN can nominate two administrators to NIO’s board (as lengthy it upholds no less than 15% possession).

NIO stated the partnership will search for strategic tech companions in worldwide markets. “With the improved stability sheet, NIO is properly ready to sharpen model positioning, bolster gross sales and repair capabilities,” NIO’s CEO William Li defined.

The information comes as NIO expands the model abroad with new mannequin launches. With the launch of the new ES6 and EC6, NIO’s lineup has utterly shifted to its next-gen 2.0 platform.

Regardless of EV deliveries climbing 135% quarter-over-quarter in Q3, NIO continues to be shedding cash. NIO posted a web lack of $624 million (RMB 4.6 billion) within the third quarter. As of Sept 30, NIO had $3.3 billion in money and equivalents (excluding restricted money and short-term investments) on its stability sheet.

NIO expects to ship between 47K and 49K EVs in This autumn, up 17% to 22% from final yr. Revenues are projected between $2.2 billion and $2.3 billion.

The EV maker trimmed around 10% of its employees final month amid intensifying competitors. NIO additionally minimize costs earlier this yr to maintain tempo with market leaders like BYD and Tesla.

Following the information, NIO inventory is up 5% in Monday’s buying and selling session. NIO’s shares are down almost 50% from a peak of $16.18 per share this summer season. The Chinese language EV makers’ share costs have slipped 24% over the previous 12 months.