This article first appeared on GuruFocus.
Sep 10 – NIO Inc. (NYSE:NIO) shares fell about 10% on early Wednesday after the company unveiled an offering of up to roughly 181.8 million Class A ordinary shares, split between American depositary shares (ADSs) and ordinary shares depending on investor demand.
The company also granted underwriters a 30-day option to buy up to about 27.3 million additional ADSs, which would settle only as ADSs if exercised. NIO says it will use proceeds to invest in core EV technologies, new vehicle platforms and models, expand its battery-swap and charging network, and strengthen its balance sheet for general corporate purposes.
Lead underwriters include Morgan Stanley (NYSE:MS), UBS (NYSE:UBS) and Deutsche Bank (NYSE:DB). Management frames the offering as proactive financing to support product development and infrastructure; analysts flag potential dilution for existing holders. The move follows NIO’s recent production targets and expanded partnerships, and it arrives as the EV sector remains volatile.
Investors should weigh the company’s growth plans and infrastructure investment against the immediate dilution risk and watch how NIO allocates the new capital.
Based on the one year price targets offered by 24 analysts, the average target price for NIO Inc is $6.16 with a high estimate of $9.01 and a low estimate of $3.00. The average target implies a downside of -1.90% from the current price of $6.28.
Based on GuruFocus estimates, the estimated GF Value for NIO Inc in one year is $9.62, suggesting a upside of +53.18% from the current price of $6.28. Gf value is Gurufocus’ estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business’ performance. For deeper insights, visit the forecast page.