NIO Shares Slip on the New Convertible Debt Issue and a Rare Downgrade as Citi Now Sees Limited Short-Term Upside Potential Amid the Launch of “Not Good Enough ET7”

NIO (NYSE:NIO), the loftier-flying Chinese EV manufacturer, is under pressure level today from a confluence of factors that seem to be weighing on the otherwise buoyant outlook of investors.

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NIO announced yesterday that information technology is at present looking to consequence at least $1.3 billion in convertible notes:

"[NIO] today announced a proposed offer (the "Notes Offering") of US$650 million in amass principal amount of convertible senior notes due 2026 (the "2026 Notes") and Usa$650 million in aggregate primary amount of convertible senior notes due 2027 (the "2027 Notes," and, together with the 2026 Notes, the "Notes"), subject to market conditions and other factors. The Company intends to grant the initial purchasers in the Notes Offering a 30-twenty-four hour period selection to buy up to an boosted U.s.a.$100 1000000 in amass primary amount of the 2026 Notes and Usa$100 million in aggregate principal amount of the 2027 Notes. The Visitor plans to employ the net proceeds from the Notes Offering mainly for general corporate purposes and to further strengthen its cash and residuum canvas positions."

Bear in mind that these notes may be redeemed by NIO earlier maturity. Upon maturing, however, the debt is converted into equity. Given the multi-year elapsing of this debt, in that location is no immediate dilution threat from this transaction.

Nonetheless, NIO's downgrade by Citi presents a much more strong bearish influence. To wit, Citi analyst, Jeff Chung, downgraded NIO today from a 'Buy' to 'Neutral' designation while pegging a $68.30 stock toll target. While explaining the rationale backside this move, Chung commented:

"[The ET7 is] good but not enough to make whatever disquisitional changes from Tesla's challenge."

Based on this cess, Chung noted that NIO might just witness a limited incremental issue of 3K to 4K units on sales beginning in Q1 2022. The annotator lowered the amass FY 2021 sales estimate from 92K units to 82K units. For FY 2022, Chung now expects NIO to sell only 144K units versus 162K previously expected.

As part of its NIO Day 2020 event, the company had removed the wraps from its ET7 sedan on the 09th of January 2021. With a range of over 1,000 km when equipped with a 150-kWh bombardment pack, the ET7 is expected to debut in Q1 2022 with a minimum price tag of around $lxx,000 (RMB 448,000) earlier the awarding of subsidies. If, all the same, users subscribe to the visitor's Battery-as-a-Service (BaaS) facility and hire the base lxx-kWh battery pack for $151 per calendar month, the ET7'southward price would be slashed to $59,000 (RMB 378,000). For more details, head over to our dedicated coverage of the effect here.

Source: https://wccftech.com/nio-shares-slip-on-the-new-convertible-debt-issue-and-a-rare-downgrade-as-citi-now-sees-limited-short-term-upside-potential-amid-the-launch-of-not-good-enough-et7/

Posted by: imeshitho1987.blogspot.com