Xpeng Prices Upsized 48M Follow-On Equity Offering At 8% Discount

Xpeng Inc – ADR XPEV shares are back to its way lower after Tuesday's modest rebound after the Chinese EV maker priced its upsized follow-on offering at a discount to the stock's traded price.

What Happened: Xpeng on Wednesday priced its upsized follow-on public offering of 48 million shares at $45 per share, a 7.6% discount to the $48.6 at which the shares closed Tuesday.

The size of the offering was revised upward from the 40 million shares the EV maker originally intended to sell.

Xpeng also provided a 30-day option for underwriters for purchasing an additional 7.2 million shares to cover over-allotments.

Gross proceeds from the offering are expected to be $2.16 billion. The company expects the offering to close Dec. 11.

Why It's Important: The offering has come at a time Chinese EV stocks have run up strongly. Since Xpeng hit a record high of $74.49 on Nov. 24, it has pulled back amid concerns regarding regulatory crackdown in China and delisting worries in the U.S.

The news of the offering has only aggravated the weakness.

Taking another perspective, the increased capital should give Xpeng the wherewithal to pursue growth opportunities, which is a long-term positive for the stock.

In premarket trading Wednesday, Xpeng shares were sliding 4.17% to $46.65.

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