NIO Stock Is Falling. It’s the Latest EV Maker to Offer Convertible Bonds
$NIO Inc(NIO.US$ The dilution could be about 5%. NIO ADRs are down 6.6% in premarket trading Tuesday. Fisker stock (FSR) dropped about 4% after announcing plans to sell convertible notes in July. Nikola stock (NKLA) dropped about 6% after announcing similar plans in August. Each offering, of course, is for a different amount and represents different potential dilution to existing shareholders.
Here are other articles shared related to Nio convertible notes:
Nio’s planned $1 billion convertible offering follows stretch of swelling losses
NIO: Quarterly Loss of 6 Billion?
Nio’s planned $1 billion convertible offering follows stretch of swelling losses
NIO: Quarterly Loss of 6 Billion?
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One reason is that convertible bonds can be turned into shares in the company, potentially diluting existing holders. Companies like convertible bonds because they allow companies to borrow money at lower interest rates than standard corporate bonds.
NIO plans to offer about $1 billion in convertible bonds. Specific details, including the number of shares the bonds could convert to, isn’t yet known. Final terms will be disclosed when the deal approaches completion.
The conversion price will be close to, or a little higher than, NIO’s current stock price. If that’s the case, the bonds might be converted into roughly 90 million shares. There are currently about 1.7 billion shares outstanding, including those underlying NIO ADRs.
NIO plans to offer about $1 billion in convertible bonds. Specific details, including the number of shares the bonds could convert to, isn’t yet known. Final terms will be disclosed when the deal approaches completion.
The conversion price will be close to, or a little higher than, NIO’s current stock price. If that’s the case, the bonds might be converted into roughly 90 million shares. There are currently about 1.7 billion shares outstanding, including those underlying NIO ADRs.
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