NIO stock nosedived after the Chinese electric vehicle (EV) firm launched a massive $1 billion convertible bond financing in an after-hours session on Monday.
These bonds will feature a split maturity, with half maturing in 2029 and the other half in 2030. However, specific financial details of the bond series, such as the interest rate and equity conversion terms, have not been disclosed yet.
The funds raised through this offering will be used to repay existing debt and strengthen the car maker’s balance sheet.
Investors quickly reacted to the news, causing NIO stock to drop 5.63% to $9.73 in pre-market trading on Tuesday compared to the previous session.
The news comes after NIO Inc. (NYSE: NIO) unveiled grim financial results for the second quarter amid lower sales and deliveries.
As reported earlier by ABBO News, NIO’s net loss for Q2 stood at RMB5.79 billion ($798.9 million), marking a significant increase from the RMB2.26 billion recorded during the same period just a year ago.
NIO also reported a steep drop in vehicle sales, plummeting by over 22% compared to the previous quarter, with a year-on-year decline of 24.9%.
However, NIO has revised its Q3 revenue guidance, now projecting a range between RMB18.90 billion and RMB19.52 billion. This bold outlook surpasses last year’s RMB13.00 billion and even beats analyst consensus estimates of RMB18.03 billion.
In addition, NIO plans to ramp up electric vehicle deliveries aggressively, targeting a range of 55,000-57,000 units in Q3, a substantial leap from the 31,607 delivered last year.
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