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NIO Inc. (NIO) has a great rally since March and closed at $14.57 on 9 July 2020. Several unidentified Asia-based investment funds should be the winners for this rally.

Starting from February 2020, NIO Inc issued three private placements of short-term convertible bond which total in US$435 million. The following are the summary of private placements (For more detail, please refer to Reference section):

  1. All convertible bonds bear zero interest and financing for around one year.
  2. Holders of the notes have the right to convert either all or part of the principal amount of the notes into Class A ordinary shares (or ADSs) of NIO Inc. after six months of issuance, at a conversion price ranged from US$3.07 to US$3.5.

Based on the closing price US$14.57 on 9 July 2020, the unrealized return of the convertible bonds are ranged from 374% to 316%.

The future impact on the stock price

The convertible bonds are allowed to covert starting mid-August 2020. The potential profit realization may create pressure on NIO Inc. (NIO) stock price.

Reference

https://ir.nio.com/news-events/news-releases/news-release-details/nio-announces-private-placement-us100-million-short

https://ir.nio.com/news-events/news-releases/news-release-details/nio-announces-additional-us100-million-private

https://ir.nio.com/news-events/news-releases/news-release-details/nio-announces-us235-million-private-placements-short

Investment Disclaimers


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