What Does Nio US Stock Sale Mean For Its Hong Kong Listing Plans?

Shares of Nio Inc. (NYSE: NIO) fell more than 6% in Wednesday’s trading after the Chinese electric vehicle maker announced plans to sell up to $2 billion of American depositary shares in an at-the-market offering.

What Happened: The sale will be the biggest U.S. offering by a Chinese company following Didi Global Inc.’s (NYSE: DIDI) initial public offering in June.

The share sale will help Nio, seen as a Tesla Inc. (NASDAQ: TSLA) rival, to raise cash and repay debt as it continues to struggle with supply-chain disruptions. However, it has also led to speculation about the company’s plans for a dual-listing in Hong Kong.

Deutsche Bank analyst Edison Yu said in a note that Nio’s U.S. fundraising plan reflected further delays in the Hong Kong listing process, according to a report by Bloomberg.

However, Bloomberg Intelligence analyst Steve Man differed with the opinion, saying that the fundraising will help Nio to reduce its debt and he does not see the company facing any trouble with its Hong Kong listing. “The Hong Kong IPO is less about money-raising, but more about listing in greater China,” Man said.

See also: How To Buy Nio (NIO) Stock

Why It Matters: In July, Xpeng Inc. (NYSE: XPEV) became the first among the U.S. listed-Chinese EV trio of Xpeng, Nio and Li Auto Inc. (NASDAQ: LI) to complete a dual-listing in Hong Kong. Li Auto’s shares commenced trading in Hong Kong last month.

Meanwhile, it was reported in July that Nio’s secondary listing was yet to receive clearance from the Hong Kong stock exchange due to questions about the company’s user trust holdings.

Nio reported delivering 5,880 vehicles in August, down 25.9% from July, citing chip shortage woes.

Price Action: Nio’s shares closed more than 6% lower in Wednesday’s trading at $38.14.

Read Next: Alibaba, Tencent, NetEase And Nio Rivals Xpeng, Li Auto Fall In Hong Kong On Renewed Regulatory Concerns

Photo: Courtesy of Nio