Chinese electric vehicle maker NIO’s stock (NIO) is surging on Monday after it announced a significant investment from an Abu Dhabi–backed fund.
CYVN, an investment fund majority owned by the Abu Dhabi government, will invest $2.2 billion in fresh capital in exchange for 294 million newly minted NIO class A shares at a price of $7.50 per share. The new share purchase would boost CYVN stake in NIO to 20.1%, following an investment of $1 billion CYVN made in July, making it NIO’s largest single shareholder.
“With the enhanced balance sheet, NIO is well prepared to sharpen brand positioning, bolster sales and service capabilities, and make long-term investment in core technologies to navigate the intensifying competitive landscape, while continually improving execution efficiency and system capabilities,” said William Bin Li, NIO’s founder, chairman, and CEO, said in a statement. Despite CYVN’s purchase, Li retains majority voting power in NIO due to his ownership of Class C voting shares, according to Reuters.
Shoppers learning about ET5 models at a NIO auto store in Yantai, Shandong province, China, on Nov. 26, 2023. (Costfoto/NurPhoto via Getty Images) (NurPhoto via Getty Images)
NIO’s move higher today notwithstanding, shares are still down nearly 13% year to date, reflecting a tumultuous period for the company. Earlier this month NIO reported a wider loss for the quarter compared to a year ago, though revenue did rise 47% in the same time period. The company also announced a 10% cut in head count in November, citing “fierce competition.”
Spurred on by Tesla (TSLA), the Chinese domestic EV market has been roiled by deep price cutting among EV rivals looking to capture market share in the world’s largest auto market. Despite these market headwinds, NIO intends to show a new flagship EV sedan at its NIO Day event later this month and will launch its “Alps” sub-brand of cheaper EVs in Europe next year. NIO currently has eight EVs in its product portfolio, which include five SUVs and three sedans.
For its part, CYVN dubs itself a fund that invests in “advanced mobility solutions” to accelerate the transition to a “more sustainable future.” The new capital injected by CYVN will ostensibly give NIO more runway for 2024 and 2025 to achieve its new product launches.
Nonetheless, Wall Street is still a little wary of NIO’s path forward, given its delivery guidance for the near term missed the mark, and more loss-making is projected in the longer term.
“NIO’s guidance of between 47,000 and 49,000 delivery units for Q4 2023 (+20% Y/Y) was weaker than expected as momentum from new launches tapers,” CFRA analyst Aaron Ho wrote in a note following NIO’s earnings results in early December. “We expect NIO to be loss-making in 2023-2024 on higher R&D spend (mainly for battery swapping, autonomous driving, and development of mass market cars) and start-up costs for the business expansion in Europe.”
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
