NIO IPO Results: $1 Billion Raised, Tesla’s Success Held Down NIO Value

SEP 12 2018 BY MARK KANE 16

NIO raised approximately $1 billion through IPO, but the automaker had hoped for more.

According to the latest reports, NIO‘s IPO ended at the bottom of the target price range per share ($6.25 to $8.25) as the company sold some $1 billion worth of shares at $6.26.

The market valuation stands now at $6.41 billion, which is far less than hoped for months ago (up to $20 billion).

Part of the reason for the more difficult capital raise is apparently Tesla – confusion around taking the company private, production ramp-up and profitability. NIO was sometimes considered as a candidate for a so-called Chinese Tesla, so it could be dragged down a little bit by Tesla’ recent successes.

On the other hand, in the first half of 2018, NIO noted revenue of just $6.95 million, at net losses of $502.6 million. By the end of August, the company delivered some 1,600 ES8 electric SUVs (with 15,778 ordered/reserved). The second volume model, the smaller ES6, is to be introduced by the end of this year.

“NIO priced its shares at $6.26, just above the low end of its $6.25 to $8.25 target price range, according to four sources familiar with the process. The deal will value the firm at $6.41 billion. It is due to begin trading on Wednesday on the New York Stock Exchange under the symbol “NIO”.”

“At the start of the IPO process, NIO had hoped for a valuation of as much as $20 billion, according to one person familiar with the company’s plans.”

Source: Reuters

Categories: NIO

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16 Comments on "NIO IPO Results: $1 Billion Raised, Tesla’s Success Held Down NIO Value"

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Jim Whitehead

Who trusts a car that can’t yet meet US road standards? Also, new automakers, like Faraday Future, have a 99% chance of going bankrupt within a few years. Tesla was the sole exception, the 100th case, and it nearly went bankrupt in 2008 and early 2013.

Bustya

I doubt faraday would make their own batteries. So they would essentially become like a chinese cellphone assembler like Vivo, Xiaomi,etc. They dont make a ton of profit, but they do employ a lot of people.

Nick

They don’t need to meet US Road Standards to drive in China.

antrik

Why would Tesla’s success depress Nio’s valuation? If anything, I would think it should make investors more confident that an EV start-up actually has a chance of succeeding?…

Unless they were hoping that Tesla would go out of business, and Nio could take their place on the global market… Which would be a veeeeery long shot.

Another Euro point of view

Thought exactly the same, could as well be the opposite actually. Skepticism about ability of making profits selling EVs is keeping NIO ‘s valuation down. Thing is that at a precise moment it is very hard to exactly identify what influences a stock price. Weird conclusion & things happening in this site recently.

Mark.ca

+1
I didn’t get it either. It’s not like they are stepping on each other’s toes.

Rolando

various articles like in Bloomberg and news coverage state it just the other way around as nearly all analysts see it :
Tesla’s management chaos and Elon Musk erratic behavior the last month brought the NIO share price down to the lowest end of the range, and was bad for the EV market in general.

Strange how InsideEvs could spin doctor this to just the opposite meaning : into ‘Tesla success’ brings down other EV producers rating….

Mark.ca

How the hell would “bad behavior” form Tesla CEO affect the share price of a COMPETITOR in a NEGATIVE way? Logic is not your strong suit i take….
The blogs can say whatever they want, it just doesn’t pass the smell test.

Rolando

First it’s not just my logic, it’s from several including serious Renewable Energy and EV friendly news agencies who saw this as I wrote above “”was bad for the EV market in general “”.
Nio is an EV company that raises funds and then burns through tons of cash, to raise new funds …. sound familiar ?!?

The logic is simple: the most visible face of the global EV business is Elon Musk and global measuring stick for EV is Tesla to which all new released or planned EV’s are compared to (e.g. all those “Tesla killer” stories). So any chaos in management or attitude of the CEO as THE halo figure of the EV world – has indeed impact on the struggling EV world.

Inside the ‘Tesla fanclub filter bubble’ a kind of paranoia seems to persist, where any hint of plain facts even from EV enthusiasts or general positive inclined media is considered as ‘short seller attack’ or ‘Tesla haters’ or ‘Trolls’ etc…

Mark.ca

Come on, try again… your first attempt failed.
And now with NIO at $9.50 you have additional confirmation that what i said is true. Ciao!

Mark.ca

Today’s high 13.80…. it’s time for the “news” outlets to come up with another story to fit the events.

antrik
No need to get personal. While it’s not logical that the recent drama around Elon, entirely unrelated to Tesla’s ability to make a profit, would affect Nio’s valuation, investors are not exactly known for always being rational… Frankly, talk about a 20 billion valuation for Nio was just totally absurd. Tesla didn’t get that kind of valuation until *after* the Model S became a runaway success. Nio’s prospects at this point are not nearly as certain. On top of unclear demand, they haven’t even started facing the biggest challenge, that is doing their own mass manufacturing. Interestingly, Bloomberg (IIRC) posted an article showing a way less rosy outlook for Nio just a few days ago; while in the past, almost all reporting on Nio (and other Chinese EV start-ups) in “western” media were raving about them, as if they already achieved major success, and would be cornering Tesla and other established makers any day now… I’d say people actually starting to take a serious look at Nio’s situation before making investments, is what brought down the valuation to more realistic levels. (The biggest eye-opener for me was that Nio outsourcing initial production was not in fact a display of strategic… Read more »
antrik

I think the confusion goes back to the disconnect between Tesla getting a lot of negative press lately for tangential matters, while their actual outlook has been very positive.

James

Lol, the source says it’s Tesla failure which held down and this site talks about Tesla’s success

Mark.ca

“according to sources familiar with the matter, dragged down by investor concerns about the prospects of chief competitor Tesla Inc”
For once you told the truth, what happened?
Their comment “according to sources familiar with the matter” is fishy at best. Sounds like an excuse to me.

John-EU

The NIO es6 would do great in Europe. Like the Hyundai Kona. I wish them all the best. I prefer companies that try over those that deliver mostly VaporWare!