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Cyber Monday Deal: Up to 55% off CLAIM SALE
Nio plunges on report it may need to raise additional $3B from investors
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Published Sep 25, 2023 08:02AM ET
© Reuters Nio (NIO) plunges on report it may need to raise additional $3B from investors
Chinese electric vehicle maker, Nio Inc. (NYSE:NIO) fell nearly 5% in pre-market trading Monday morning following reports that the automaker is considering raising an additional $3 billion from investors.
Bloomberg reports, citing unnamed sources familiar with the matter, that the automaker has approached Middle Eastern investors concerning the fundraising. The sources believe that fundraising could happen as soon as next year.
The talks are still in progress, and subject to change. There’s no certainty Nio will continue with the fundraising, they added.
In June, Nio secured approximately $738 million through a share sale to CYVN Holdings LLC in Abu Dhabi, and earlier this month, the company raised $1 billion from convertible bonds, which led to a nearly 20% decline in its shares listed in the United States.
Nio has yet to achieve profitability and continues to experience significant cash burn. In the last quarter, the company reported a loss exceeding expectations, amounting to over $800 million. Furthermore, its market capitalization has declined by more than 50% compared to the previous year, currently standing at approximately $14 billion.
In June, Founder and Chief Executive Officer William Li acknowledged that Nio had to postpone certain fixed asset investments and adopt a more prudent approach to its international expansion efforts. Nevertheless, just last week, the company introduced its own-branded smartphone, capable of synchronizing with its vehicles.
Shares of NIO are down 6.57% in pre-market trading Monday morning.
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