- NYSE:NIO had a tumultuous day, closing the session 0.54% higher.
- NIO announces an at-the-money ADR stock offering of $2 billion.
- A Chinese electric vehicle conference reports that sales have tripled in 2021.
NYSE:NIO investors were taken on a wild ride on Tuesday. Shares of the Chinese electric vehicle maker jumped higher as the markets opened, but erased those gains into the close on a major announcement. Nio stock gained 0.54% on Tuesday and closed the trading day at $40.59. The sell off in the afternoon continued into after hours trading as Nio dropped by a further 3.47%. Nio’s move came during a session where growth stocks, like electric vehicle makers, thrived. The industry was paced by Tesla (NASDAQ:TSLA) which gained 2.64%, and domestic rivals like XPeng (NYSE:XPEV) and Li Auto (NASDAQ:LI) were also trading higher.
The catalyst for Nio’s afternoon sell off was an announcement of an at-the-money ADR stock offering for $2 billion. While investors usually do not support the dilution, the capital that is raised from these stock offerings is usually a good thing for the company in the long run. Nio is planning to use the injection of money to strengthen its balance sheet, as well as other corporate purposes. An at-the-money stock offering is usually a sign that the company believes its stock is fairly priced and does not expect it to go much higher in the short-term.
NIO stock forecast
Some welcome news out of the industry conference held by the Chinese Automotive Technology and Research Center over the weekend. The vice minister of China’s Ministry of Industry and Information Technology reportedly spoke about the increase in electric vehicle sales in the country. He reported that through August, there were 1.7 million new energy vehicles sold which is nearly triple the number sold through the same period in 2020. Despite Nio recently lowering guidance on Q3 deliveries, the stock jumped over 3% when the markets opened on Tuesday.