NIO Inc. (NYSE: NIO)
NIO Inc, a Chinese startup automaker seeking to compete with companies such as Tesla Inc., has begun trading on the New York Stock Exchange today (Wednesday, September 12) under “NIO” symbol. Morgan Stanley, JPMorgan Chase & Co., and Goldman Sachs Group Inc., were the lead underwriters on the IPO.
The underwrites have been granted the option to purchase an additional 24 million shares to cover over-allotments at the initial public offering price less the underwriting discounts and commissions. Other banks involved in the deal include Citigroup, UBS, Bank of America Merrill Lynch, Deutsche Bank, and Credit Suisse.
The Shanghai-based company reported a loss of $502.6 million during the first half of this year and revenues of $6.95 million. NIO also started delivering ES8 pure-electric in June, which is considered a rival to the Model X car that is produced by Elon Musk’s Tesla. The ES8 is focused on passenger experience and comes at a starting price of $68,000, undercutting Tesla’s Model X. Tesla already has about
By the end of last month, NIO had a total of 15,778 unfulfilled ES8 reservations after meeting about 1,600 deliveries for the vehicle in China. Overall, the company posted $7 million in annual sales in China, compared to the $2 billion sales reported by Tesla in the country.
However, Tesla faces massive import tariffs in China over its US-made vehicles due to the ongoing trade war between China and America.
NIO’s public offering comes at a time when a numerous Chinese automakers are looking for ways to raise funds needed to create battery technologies and autonomous driving. The company priced its shares at $6.26, above the its earlier price range of $6.25 to $8.25 per share.
Industry analysts believe that NIO lowered its price target over investor concerns about Tesla’s prospects. Tesla has been struggling to meet its electric-car production targets, and the erratic behavior of its CEO has also weighed on its stock as well as those of its peers.
At a price range of $6.26 per share, NIO could command a market value of $6.41 billion. NIO is likely to raise up to $1.15 billion if the underwriters exercise all the options that they have been granted.
The firm plans to use the proceeds of the initial public offering for carrying out research and developing technology and technology, as well as developing and marking manufacturing facilities.
NIO Inc. Company Profile
NIO specializes in designing and developing high-performance, premium electric, autonomous vehicles. The Company has R&D and design experts from around the world with significant technology and management background from leading automobile and high tech companies.
NIO is also involved in the FIA Formula E Championship, the world’s first single-seater, all-electric racing series. The company was founded by William Li in 2014 and is headquartered in Shanghai, China. –Craft