Why Nio Stock Is Sliding Wednesday

Shares of Chinese electric vehicle maker Nio Inc – ADR (NYSE:NIO) are trading lower Wednesday afternoon following the announcement of a $1 billion equity offering.

What To Know: The company priced the offering of 181,818,190 Class A ordinary shares at $5.57 per ADS and HK$43.36 per Class A ordinary share. This move is intended to raise capital for the company’s growth and development initiatives.

Nio stated that the net proceeds will be used to fund research and development of core technologies for its smart electric vehicles, develop future vehicle models and platforms and expand its battery swapping and charging network. Per Nio, the funds will also be used to strengthen the company’s balance sheet and for general corporate purposes.

The offering consists of both ADS and Class A ordinary shares. The ADS offering is expected to close on or about Sept. 11, with the ordinary share offering slated to close around Sept. 17.

Benzinga Edge Rankings: According to Benzinga Edge stock rankings, the company has a Momentum score of 64.25, significantly higher than its Growth score of 13.27.

Price Action: According to data from Benzinga Pro, NIO shares are trading lower by 9.47% to $5.68 Wednesday afternoon. The stock has a 52-week high of $7.71 and a 52-week low of $3.02.

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How To Buy NIO Stock

Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.

For example, in NIO’s case, it is in the Consumer Discretionary sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.

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