Shares of Nio (NIO) are up 12% on news that the Chinese electric vehicle maker is receiving a
$2.2 billion U.S. investment from Abu Dhabi-based investor CYVN Holdings.
The new investment increases CYVN’s holding in Nio to 20% after a previous investment of $738.5 million U.S. and a share purchase of $350 million U.S. earlier this year.
With the new investment, CYVN becomes the largest single shareholder of Nio. It also will have the right to nominate two directors to the company’s board.
Investors have become increasingly nervous about Nio’s balance sheet, with the company recently denying that it is planning to raise up to $3 billion U.S. in fresh capital.
Nio is not yet profitable or generating free cash flow. As such, it is using about $250 million U.S. each quarter to fund its operations.
Before today (Dec. 18), the stock of Nio had declined 17% in 2023 to trade at $7.98 U.S. per share.
