Nio's stock soars again after investment deal that could grow to $4.8 billion

By Tomi Kilgore

EV maker's stock heads for best month in 4 years as stimulus measures lead to big rally in China's stock market

The U.S.-listed shares of Nio Inc. shot up toward another double-digit gain on Monday, after a disclosure of a new big investment and a continued surge in China's stock market fueled the rally.

The Shanghai-based electric-vehicle maker (NIO) (SG:NIO) said over the weekend that "strategic investors" will invest RMB3.3 billion in cash ($470.7 million) for newly issued shares of Nio Holding Co. Ltd., which holds a controlling interest in Nio China.

At the same time, Nio will invest a total of RMB10 billion in cash ($1.43 billion) for new Nio China shares.

Nio's stock ran up 13.8% in premarket trading, after surging 12.8% on Friday. The stock was on track to open at the highest prices seen since mid-January.

"This investment not only demonstrates the strategic investors' firm support for the high-quality development of the electric vehicle industry but also underscores their strong recognition of Nio's unique values and industry leadership," Nio said in a statement.

After those investments, Nio will have an 88.3% equity interest in Nio China, while the strategic investors will own the remaining 11.7%.

Separately, Nio said it also has the right to invest an additional RMB20 billion ($2.85 billion) in additional Nio China shares by Dec. 31, 2025. That would bring the total investment to RMB33.3 billion ($4.75 billion).

Nio's stock had already run up 61.4% in September. With Monday's rally, would be on track for the biggest monthly gain since the record 94% gain in June 2020.

What's also been providing a big boost to Nio's stock has been stimulus measures put in place by China's government to boost the economy and attract investors.

The iShares China Large-Cap ETF FXI climbed 2.4% in Monday's premarket, after rocketing a record 18.5% last week.

Something may also be fueling investor interest Monday: China's stock market will be closed from Oct. 1 to Oct. 7 for the China National Day celebrations, known as the Golden Week holiday.

Since Aug. 7, when Nio's stock closed at its lowest price ($3.67) since May 22, 2020, the stock was set to open Monday with a 102% gain.

-Tomi Kilgore

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09-30-24 0717ET

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