Nio , the Chinese-based electric vehicle manufacturer, fell as much as 6% on Friday after it announced its intent to launch a 60 million share offering.- The move comes after a monster rally for the company's stock, with shares up 1,025% year-to-date.
- Nio isn't the only
EV company taking advantage of its soaring stock price, with Tesla announcing a $5 billion at-the-market offering earlier this week. - Visit Business Insider's homepage for more stories.
Nio fell as much as 6% on Friday after it announced a proposed offering to sell 60 million shares, a raise that at current prices would net the Chinese company more than $2.5 billion in proceeds.
The underwriters of the offering, which include Morgan Stanley, will be granted a 30-day option to purchase an additional 9 million shares, potentially bringing the total share offering to 69 million, representing gross proceeds of nearly $3 billion at current prices.
Nio said it would use the funds raised from the proposed offering for research and development initiatives, specifically geared towards autonomous driving capabilities, as well as to expand its sales and services network.
The share offering comes following a 1,025% year-to-date rally in shares of Nio as of Thursday's close, with investors assigning an outsized premium to electric vehicle makers as they search for the next Tesla.
Nio isn't alone in taking advantage of a soaring stock price. Tesla earlier this week announced a $5 million at-the-market offering, as it takes advantage of a more than 650% year-to-date rally in the price of its stock.
Nio's strong share performance in 2020 has been driven by both investor enthusiasm and a surge in sales, with the company surpassing more than 5,000 monthly vehicle deliveries in October, representing year-over-year growth of 100%.