Why Nio shares are falling today

Investing.com -- Nio (NYSE:NIO) shares fell sharply Thursday after the electric vehicle (EV) maker announced a proposed offering of approximately 118.8 million shares, representing 5.4% of its total outstanding shares.

The company’s U.S.-listed stock slumped over 7% by 10:30 GMT in premarket trading. Its shares in Hong Kong also fell more than 5%.

The shares are priced at HK$29.46 each, reflecting a 9.5% discount from the last closing price of HK$32.55 in Hong Kong, according to deal terms reviewed by Bloomberg.

The company stated that proceeds from the offering will be used “for research and development of smart electric vehicle technologies and new products, further strengthening balance sheet as well as general corporate purposes.”

Morgan Stanley (NYSE:MS) and UBS are managing the transaction.

The announcement comes a week after Nio reported worse-than-expected fourth-quarter results and weak guidance for the current quarter.

The company posted a quarterly loss of RMB3.17 per share, wider than analysts' expectations of a RMB2.12 loss. Revenue came in at RMB19.7 billion, missing the consensus estimate of RMB20.81 billion.

Nio delivered 72,689 vehicles in the quarter, marking a 45% increase from the previous year but falling slightly short of the expected 73,207.

For the first quarter of fiscal 2025, Nio projected revenue between RMB12.37 billion and RMB12.86 billion, significantly below the forecast of RMB16.73 billion.

The company also expects to deliver between 41,000 and 43,000 vehicles, falling well short of the estimated 65,052.

The carmaker’s shares have fallen about 12% over the past month, and that decline could widen to nearly 20% if today’s premarket losses persist.