Chinese electric vehicle (EV) maker Nio (NYSE:NIO) may be in the red today, but fans of the company — and especially NIO stock — have plenty to be cheery about. This morning, Nio announced a “strategic equity investment” from CYVN Holdings to the tune of $738 million.
What’s going on with Nio lately?
Well, per the company’s news release, the EV maker recently became the recipient of a hefty investment from the Abu Dhabi government-owned CYVN Holdings. Indeed, CYVN purchased 84.69 million shares, priced at $8.72 per share, the weighted average price of Nio common stock over the past week on the New York Stock Exchange.
This deal represents the latest major investment into Nio’s EV empire — and a sizable one at that. While NIO stock is down about 5% year-to-date (YTD), CYVN’s latest investment is clearly helping the company’s share price. Shares currently trade at $9.18 apiece, a healthy premium over CYVN’s purchase price.
NIO Stock Slides Despite Massive Investment
It seems that both parties are pleased with this investment, including CYVN Chairman and Managing Director Jassem Al Zaabi, who had some kind words following the deal’s completion:
“Our strategic investments in NIO are driven by our appreciation of its leading brand, innovative and premium products, and proven technological capabilities in the smart electric vehicle market […] We are excited to develop strategic partnerships with NIO, and are fully committed to providing strategic value that will support NIO’s international business growth. We will join hands with NIO to drive the global energy transition and sustainable growth for the whole humanity.”
Nio founder, Chairman and CEO William Bin Li also shared in the optimism surrounding the investment:
“The strategic investments from CYVN Holdings demonstrate NIO’s unique values in the smart electric vehicle industry. The Investment Transaction will further strengthen our balance sheet to power our continuous endeavors in accelerating business growth, driving technological innovations and building long-term competitiveness […] In addition, we are excited about the prospect of partnering with CYVN Holdings to expand our international business. With the vision of Blue Sky Coming, we will continue to strive for technological breakthroughs and user experiences beyond expectations, contributing to a more sustainable future for the globe”
Despite the impressive nature of this investment, investors appear to be somewhat disinterested. NIO stock is down about 2% currently on a relatively weak day for the markets. Indeed, the S&P 500 and Nasdaq Composite are both down by less than 1% at the time of this writing.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
