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Chinese electric vehicle manufacturer
NIO
Inc.
The price of its initial public offering in the United States was at the bottom of its indicative price range, placing a $ 6.42 billion valuation on the Shanghai-based company, which presented itself as an emerging Tesla competitor.
The startup, supported by the giant of the Chinese internet
Tencent Holdings
Ltd.
TCEHY 1.82%
, had to deal with a difficult market environment. Shares of rival carmakers fell and Chinese equities were shaken by concerns over growth, trade and weak currencies.
NIO has set the price of the final offer at $ 6.26 per receipt from the US depository, said Wednesday the company. That would give a $ 1 billion product, before subtracting the costs of selling the shares, stimulating production, and developing the technology.
The size of the offer does not reach the previous target of 2 to 3 billion dollars previously announced by the Wall Street Journal. More recently, the company set an indicative price range of $ 6.25 to $ 8.25 per share. A representative of NIO did not immediately return a request for comment.
The automaker, founded in 2014 by Chinese entrepreneur Bin Li, is expected to debut on the New York Stock Exchange on Wednesday under the symbol NIO. It has not yet generated a lot of revenue, recording $ 7 million in revenue in the first half of 2018.
Fundraising has also been a test of investor confidence in the development of electric cars in the world's largest car market. Shares of Chinese competitor BYD Co. fell 36% this year in Hong Kong, underperforming the 12% decline in the Hang Seng benchmark.
According to the China Association of Automobile Manufacturers, Chinese car sales in August fell for the second month in a row. Analysts attributed the decline to a combination of market saturation and consumer confidence.
In the meantime, tight control of Tesla's production capacity and CEO Elon Musk's desperate attempt to take over the private US automaker have pulled his shares down by 26 percent since Aug. 7, when Mr. Musk tweeted privatization.
At the end of last year, NIO launched its first production car, a seven-seat sport utility vehicle. He plans to launch a second smaller SUV in the first half of 2019.
Morgan Stanley
,
Goldman Sachs Group
Inc.
and
JPMorgan Chase
& Co led the transaction.
Write to Joanne Chiu at [email protected]
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