Public Markets

After Raising $1B In IPO, NIO Falls In Early Trading

After pricing yesterday at the low-end of its range, NIO opened lowered today, struggling in early trading. The young Chinese company makes and sells electric cars.

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Raising $1.0 billion in its public debut, NIO has now raised around $3.5 billion including the money it raised as a private company.

NIO’s slow opening trades were presaged by the company’s IPO pricing process. The company priced its IPO at $6.26 per share, the low end of its proposed range. NIO opened at $6.00 and has dipped under $5.70 before recovering. NIO shares are worth $6.00 once again as of the time of writing.

Per the firm, NIO sold 160 million shares in its debut. The company’s underwriters have the option by pick up another 24 million shares if they wish. If NIO’s underwriters do exercise that option, the company could raise an additional $150.24 million.

NIO may need the money. It has an extremely limited operating history as a revenue-generating entity, making its ramp to profitability completely opaque; how much runway it will need to reach financial stability is not clear.

Regardless, a company with effectively no revenue managed to raise $1 billion today, so if you hear any codswallop from your local unicorn about the market not being ready for its IPO, just giggle at them.

Illustration: Li-Anne Dias


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