Nio Mops Up $2B Following Closure Of At-the-Market Offering; Can Its Beaten Down Stock Find Redemption?

Nio, Inc. NIO shares fell over 9% in the week ending Nov. 19, underperforming most of its EV peers. The stock, however, saw an upward bounce in late trading on Friday.

What Happened: Nio announced Friday following the market close that it has completed its previously announced at-the-market offering of 53.29 million ADSs and raised $2 billion in gross proceeds.

The company said it plans to use the net proceeds from the offering to strengthen its balance sheet further and for general corporate purposes.

Nio first announced the offering on Sept. 7.

Why It's Important: Nio shares are down about 20.7% for the year-to-date period, grossly underperforming EV market leader Tesla, Inc. TSLA, which is up over 61%. Nio's Chinese peers XPeng, Inc. XPEV and Li Auto, Inc. LI are up 9.5% and 6.1%, respectively, during the same period.

Nio did have its moments of despair this year, when supply constraints cut into its deliveries. In October, a production line revamp added to supply woes, dragging back deliveries. Notwithstanding the handicaps, the company managed to report better-than-expected third-quarter results, partly aided by EV credits.

The sore spot in the quarterly results was the guidance, which underlined the pressure the company is facing on the supply side.

Related Link: Why Nio's 2022 Outlook Remains Solid, According To Mizuho

Nio's travails aren't a demand-side problem. This is evident from the abounding order flow for the company's vehicles. Once the supply side issues are ironed out and with a plethora of catalysts coming up, will Nio's stock catch up with the rest of the EV makers'?

Immediate near-term catalyst would be Nio's deliveries for November, which are expected to be released in early December. Whisper numbers floating around put deliveries at 10,000+.

Next up would the Nio Day 2021, scheduled for Dec. 18. The previous Nio Day held on Jan. 9 sent the company's shares to a record high of $66.99 in the very next session following the event. Nio uses the annual event as a platform for making key announcements regarding products and services.

With the company having already confirmed the launch of three new models in 2022, one can expect those vehicles to be unveiled at the event. Nio, which thus far has focused on the premium segment, will likely launch a mass market model under a different brand name.

The company is vigorously pursuing overseas expansion opportunities. Nio made its first stop at Norway earlier this year, and plans to expand to more European countries, including Germany, in the near future.

The proceeds from the offering will serve the company well as it embarks on expanding its product pipeline and markets.

Nio closed Friday's session up 0.65% at $38.66, rising an additional 2.82% to $39.75 in after-hours trading.

Related Link: Nio Vs. XPeng Vs. Li Auto: How October EV Deliveries Stack Up