Hey all hope you had a good weekend.
And before the markets open.
I wann do a quick update. Usually I do.
Those stock updates and news updates
in the mid week on Wednesdays.
But today I think as we have the news
after NIO ($NIO蔚来) stock final pricing
of the offering and also some other
news with stocks that I'm trading,
I thought let's do it at
the beginning of this week.
So let's dive right into NIO here. We
have the offering initially announced,
which I discussed in another video
and that video got lots of traction.
So thank you guys for watching.
And it seems like this is really
interesting for a lot of people here. So,
and in the offering as many of my
commenters have also pointed out
it was unclear regarding the pricings.
So at the very top of it in my video was
highlighting the share price at which
the offering was made. And
when it was closed was 20,44
US dollars. And this is
obviously just a closing price,
but if you look into the offering,
you could see that this is
actually what NIO wants to
do:
They estimated that the net
proceeds will be around 1.5 billion
US dollars,
and their hope that it will be
at an offering price after 20,44
US dollars.
But as we know with the
announcement today we see some
changes to this offering.
So now it will be 88.5
million shares offered and
at a price of 17 US dollars a share.
So we see more shares being
offered and a lower price.
And this results still in
an amount of 1.5 billion,
USD that NIO can raise this way.
And what we can see here is
also a right for an additional
offering of yeah.
Additionally for 13.275 million
shares that can actually be
purchased as well at this price. So
this is a quite normal procedure.
Usually you first have the
announcement of the offering,
then you need to kind of find
buyers for your offering.
And finally you announced a
pricing and in the future,
we will see more 6-Ks from.
Well, we will see an.
Closing whether or not stock
offering was successful.
So this is just a normal procedure,
but let's jump in once again
into my excel sheet here.
So I've updated it with
today's confirmed pricing.
So as you see here to 88.5 million shares,
total raising 1.5 billion,
and this now resides
in a delusion of 8.4%.
But with the additional
shares, which is new here,
it could also result in
a dilution up to 9.65%.
If those additional shares are also
purchased and this bumbs up to the cash
raise to 1.7 billion in total.
So it seems as NIO had to lower the
offering price in order to find buyers
because recently of course also the
near shares were coming under pressure.
And generally it seems that NIO is much
more confident to find those buyers at
17 USD a share which for us as NIO
gang might be a bad news in that way
that because it's more dilution, but in
the end, the result is the same. Yes,
we have dilution as
explained in the first video,
but we will have this cash raised and
actually parts of it will be going
to repurchase the stakes in NIO China,
as I have been explaining before,
and I found this interesting
article here of an analyst,
which actually of theCity
analyst, Jeff Chung,
who actually expects that NIO
will raise its holdings to an
86% stake in NIO,
up from 75.9% so a 10% increase.
And it seems like this could happen
at an agreed cost of around $2,80
per share. So I did a quick
repurchase calculation here,
and this could be totally
off. I'm not sure,
maybe as some of my viewers are
much more intelligent than I am,
so please correct me if I'm wrong here.
But what I was doing here is I just yeah,
suggested that 10% of the outstanding
shares initially of the current
outstanding shares will be purchased
back by NIO, at a purchase price of 2.8.
USD share.
So NIO will be paying roughly 300
million US dollars for that in
repurchasing, this 10% stake.
For me to seems like a balanced view,
actually, as I mentioned in my last video,
I think it is good for NIO to
leave the Hefei stakeholder
with some shares in a company as
a partner. This is to be expected.
This is good at the same time this
results in some good news for us as
investors. If we have a larger
stake in the NIO entity,
because this also reflects on future
prospects that we have in the company.
For instance, if there are profits, then
we get a larger stake of these profits,
as well as Li Bin, the CEO of
NIO. So, and if this works out,
as I have calculated here,
then if NIO is to raise the 1.5
billion and paying out to the
NIO China stakeholders here that
will leave NIO still with 1.2 billion
additional cash that they are raising
that they get in US dollars in the banks,
or if they even sell the
additional shares as well.
We'll leave them with 1.4 billion
US dollars with this cash raise.
So overall some good news here with new
cash coming in for global expansion for
R&D, for autonomous driving development
in the US as well as repurchasing,
some of the shares,
which actually also results
in less delusion because
it's kind of an equity for
equity deal here. So in total,
I would say that still the benefits and
the positives overweigh here. However,
I expect that this news with
the lower purchase price,
with the lower offering price here will
also result in some pressure for the NIO
shares. When the dilution
happens, when the actual purchase,
after shares of the
offering will be happening.
This may put NIO more under pressure here,
as well as if we look at
a NASDAQ 500 eat at well,
we're now still in the middle of this
trading range here of this tunnel,
however, already more on the upside.
So I do expect maybe this week
already some healthy pullback off the
markets and this could also affect NIO.
So this week we'll probably put some
pressure on NIO shares in general.
So you need to think about yourself,
what you want to do in that case.
For me personally,
I'm just gonna stay invested and maybe
I'm going to picks up some options and
calls, or maybe even some more shares
at the cheap if NIO is to tank.
I'm still undecided on that. But yeah,
let's see how it goes in other news 3
more stocks that I want to discuss very
quickly. One is Huami (华米 $HMI), no
news on the deal with Xiaomi so far.
Whenever I get some news I will
surely cover it here in a new video,
then just in this moment where I was
going to render this video I got some news
coming in from Huami that they are
announcing the change of the CFO
effective from October 1st.
So today announced that mr.
David Cui has tendered his
resignation CFO effective
October 1st for personal reasons.
And he will be replaced by mr.
Leon Cheng Deng a new CFO effective also
1st of October.
I haven't had any chances to look
deeper into what that means into the
background of the new CFO. Personally,
I'm surprised right now to hear this
news usually changes at the C-level
are of course very important for, to
overall prospects of the companies.
I don't know whether this is now good
or bad right now for Huami, as you know,
I am invested in Huami,
and I will give you a timeely update
whether or not this will change anything
towards my investment thesis here.
I don't think this has anything to do
with the Xiaomi partnership as of now.
However,
this is still a very important new
step you need to to watch for Huami.
And let's see how the
markets react to that.
My personal guess is that this could
have some negative effects on the share
price, but let's see what
will be happening today.
Then we had to stock split
for Tesla ($TSLA 特斯拉).
So don't be surprised if today the
Tesla share price is down a lot.
This is just a stock split.
And so we will see what implications
we're going to have on that.
And also Elon Musk is
on its way to Berlin.
So he will visit a Gigafactory as
well as working with CureVac on some
vaccine stuff with Tesla and
Tesla Grohmann and trying to,
you know, come up with
some news on the RNA front,
and actually maybe solving the "Roni
crisis" here. That would be awesome.
And on top of that,
we have an important day to day for
Luckin Coffee ($LK $LKNCY 瑞幸咖啡).
I've been covering the stock previously.
I stopped covering it basically
when Lu Zhengyao, the chairman,
the ex-chairman and cofounder,
when he took over basically the
board he placed his shills into the
board and there was basically a
takeover during the last special
shareholder meeting. And so
this is kind of, you know,
Luckin Coffee was kind of lost back
then. However I mentioned before,
if lacking coffee, would ever do
a real cleanup of the management,
that would be really interesting.
So today is a new special shareholder
meeting where they want to
get the one of the board
members back into the board,
the one who is actually responsible
for the internal investigations.
So we will see whether or not this will
be happening and what will be the news
regarding to that. So please let
me know down in the comments,
if you are interesting in further
coverage of Luckin Coffee,
maybe some of you are still invested
or think it is an interesting case to
cover. I'm definitely getting
more interested once again,
if there is a real change in the
management and the board, so yeah,
leaving this open to
covered it during this week,
and then some last remarks I am currently
pumping out maybe a video every other
day.
So make sure to subscribe to the channel
and hit that little notification button
that whenever I post a new video,
you will actually get a notification
because I can read from some of the
comments that people possibly haven't
seen some of the videos that I have
actually touched upon their questions.
Last week yesterday I have actually
done a new video about the prospects of
battery swapping technology
for Tesla in China and maybe
cooperating with NIO there. So go and
make sure to watch this video and yeah,
by subscribing and maybe
even by supporting us on
Patreon (patreon.com/DONGXii),
You can make sure to keep up to date
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notification. So that's
it have a nice week.
Hope you have a good week trading and
stay safe and see you in the next video.
