Nio Inc., the China-based electric-vehicle maker, has dismissed rumors regarding a potential capital raise, causing its stock to plummet to the lowest levels in over three months. Although Bloomberg reported that Nio was considering raising around $3 billion from investors, the company has denied these claims.
Rumors Cause Stock Drop
Following the release of the Bloomberg report, Nio’s stock experienced a significant drop, reaching an intraday low of $7.93, which is the lowest price seen since June 9. However, the stock managed to recover slightly and was down only 2.8% in morning trading after Nio issued a statement refuting the speculation.
Clarification from Nio
In response to the rumors, Nio released a statement on its website, stating that the company is not currently engaged in any capital raising activities apart from a convertible notes offering completed on September 25, 2023. Nio emphasized that there is no ongoing reportable capital raising activity.
Stock Performance and Industry Comparison
Nio’s stock has encountered a sharp decline of 46.4% since reaching a 10-month closing high of $15.46 on August 3. Year-to-date, the stock has experienced a loss of 15%. In contrast, China-based EV makers Li Auto Inc. and XPeng Inc. have seen their shares surge by 75.3% and 65.2% respectively this year. Additionally, the iShares MSCI China exchange-traded fund has declined by 8.8% in 2023, while the S&P 500 index has shown a gain of 12.4%.
Also read: Nio’s stock drops after losses widen and revenue falls more than forecast.