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NIO to Get $2.2B Investment From Abu Dhabi Government Fund
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NIO Inc. (NIO - Free Report) signed a deal to receive an investment of $2.2 billion from CYVN Holdings LLC, an Abu Dhabi government fund.
The automaker secured the investment while struggling with damping electric vehicle (EV) sales and profitability due to the price war started by Tesla. In an effort to boost efficiency, Nio slashed one-tenth of its workforce and deferred non-core projects.
Per NIO, the transaction is expected to close in the last week of December. Upon the completion of the transaction, CYVN will own 20.1% of the company's total issued and outstanding shares. Both parties are subject to a few lock-up arrangements for six months after the completion of the transaction, NIO added.
The latest transaction will make CVYN the largest single shareholder of NIO. However, William Li, founder and chief executive of NIO, will retain the maximum voting power.
CVYN will subscribe to 294 million newly issued Class A ordinary shares, priced at $7.50 per share. It will be entitled to nominate two directors to the board.
In July, CVYN invested $738.5 million in NIO. With the completion of that transaction, CVYN owned a total of 7% of NIO’s total outstanding shares.
During the latest reported quarter, the Chinese automaker incurred a net loss of $624.6 million, which widened 8% year over year. Vehicle margin in the third quarter declined to 11% from 16.4% recorded in the year-ago period. Widening losses and price cuts by competitors forced Nio to lower its prices for all models.
The Zacks Consensus Estimate for VLVLY’s 2023 sales and earnings indicates year-over-year growth of 4.2% and 70.6%, respectively. The EPS estimates for 2023 and 2024 have increased 8 cents and 7 cents, respectively, in the past seven days.
The Zacks Consensus Estimate for STLA’s 2023 sales and earnings indicates year-over-year growth of 12.3% and 10.5%, respectively. The EPS estimate for 2024 has increased 4 cents in the past 60 days.
The Zacks Consensus Estimate for BYDDY’s 2023 sales and earnings indicates year-over-year growth of 34.2% and 74.7%, respectively. The EPS estimates for 2023 and 2024 have increased 59 cents and 55 cents, respectively, in the past 60 days.
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NIO to Get $2.2B Investment From Abu Dhabi Government Fund
NIO Inc. (NIO - Free Report) signed a deal to receive an investment of $2.2 billion from CYVN Holdings LLC, an Abu Dhabi government fund.
The automaker secured the investment while struggling with damping electric vehicle (EV) sales and profitability due to the price war started by Tesla. In an effort to boost efficiency, Nio slashed one-tenth of its workforce and deferred non-core projects.
Per NIO, the transaction is expected to close in the last week of December. Upon the completion of the transaction, CYVN will own 20.1% of the company's total issued and outstanding shares. Both parties are subject to a few lock-up arrangements for six months after the completion of the transaction, NIO added.
The latest transaction will make CVYN the largest single shareholder of NIO. However, William Li, founder and chief executive of NIO, will retain the maximum voting power.
CVYN will subscribe to 294 million newly issued Class A ordinary shares, priced at $7.50 per share. It will be entitled to nominate two directors to the board.
In July, CVYN invested $738.5 million in NIO. With the completion of that transaction, CVYN owned a total of 7% of NIO’s total outstanding shares.
During the latest reported quarter, the Chinese automaker incurred a net loss of $624.6 million, which widened 8% year over year. Vehicle margin in the third quarter declined to 11% from 16.4% recorded in the year-ago period. Widening losses and price cuts by competitors forced Nio to lower its prices for all models.
Zacks Rank & Other Key Picks
NIO currently carries a Zacks Rank #2 (Buy).
Some other top-ranked players in the auto space are Volvo (VLVLY - Free Report) , Stellantis N.V. (STLA - Free Report) and BYD Company Limited (BYDDY - Free Report) . While VLVLY and STLA sport a Zacks Rank #1 (Strong Buy) each, BYDDY carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for VLVLY’s 2023 sales and earnings indicates year-over-year growth of 4.2% and 70.6%, respectively. The EPS estimates for 2023 and 2024 have increased 8 cents and 7 cents, respectively, in the past seven days.
The Zacks Consensus Estimate for STLA’s 2023 sales and earnings indicates year-over-year growth of 12.3% and 10.5%, respectively. The EPS estimate for 2024 has increased 4 cents in the past 60 days.
The Zacks Consensus Estimate for BYDDY’s 2023 sales and earnings indicates year-over-year growth of 34.2% and 74.7%, respectively. The EPS estimates for 2023 and 2024 have increased 59 cents and 55 cents, respectively, in the past 60 days.