Nio Inc – ADR (NYSE: NIO), a Chinese electric vehicle manufacturer, had been in trouble for quite some time, but things seem to have improved for the embattled company in recent weeks. On Tuesday, the company’s shares rallied strongly due to indications that the demand for its electric vehicles is on the rise ahead of the announcement of its quarterly results next week.
The NIO stock rallied by as much as 15% this week from the closing price on Friday, and it is likely that the stock is going to be in focus among investors today. The coronavirus crisis seems to be easing in China, and due to that, the demand for electric vehicles is on the rise.
According to a report from the publication China Daily, the Chief Executive Officer of the company William Bin Li conducted a live stream last week, and it proved to be a success for NIO. It helped in generating as many as 320 new orders and 5288 test drive bookings. The total sales touched as much as $21 million in a day. It is, without a doubt, a significant development for NIO and further adds to the positivity. Last month the company had managed to raise long term funding, and that had proven to be a major positive for the NIO stock.
However, one of the biggest reasons behind the resurgence in the stock price remains the fact that NIO managed to raise $1 billion in funding after having gone through a massive liquidity crunch. Due to the massive cash burn at the company, there had been fears that the company was going to soon run out of cash.
The new deal will see NIO move its main assets as well as businesses into a new entity and then hand over as much as 24.1% equity in that entity to its new investors. That new entity is going to be known as NIO China. Sign Up below for breakout alerts for $NIO and other fast-moving small caps.