XPeng just raised around $ 2.45 billion as investors bought new shares


Chinese electric vehicle manufacturer XPeng (NYSE: XPEV) said it sold 55.2 million new U.S. depositary shares for $ 45, raising around $ 2.45 billion and suggesting that investor interest in the company’s shares remains high.

XPeng is one of several electric vehicle makers that have recently decided to raise additional funds with follow-up stock offerings, taking advantage of the intense investor interest in the sector and the corresponding high valuations of their companies, to build their balance sheets and fund future product initiatives.

Among them: NIO (NYSE: NIO) said on Monday that his own offer will raise around $ 2.65 billion when it closes later this week; Li Auto (NASDAQ: LI) raised approximately $ 1.5 billion earlier this month; and industry leader You’re here (NASDAQ: TSLA) raised around $ 5 billion via a market offer last week.

XPeng plans to use the proceeds to finance the development of new vehicles and technologies, to expand its sales and service network, and possibly for strategic investments in other companies in its space.

XPeng’s sleek P7 electric sedan has sold well since its launch in June; the company is now working on a follow-up. Image source: XPeng.

XPeng’s offer was “oversubscribed,” meaning the underwriting banks opted to purchase additional shares. XPeng had initially offered 48 million shares, with its underwriters having the option to purchase an additional 7.2 million.

The fact that the underwriting banks – Credit Suisse, JP Morgan, Bank of America and Citigroup – chose to exercise this option indicates that their clients were eager to buy the new XPeng shares.

The price of XPeng’s supply may have been a factor in the demand. The offer price of $ 45 was set last Wednesday before the market opened and represented a 7.6% discount from Tuesday’s closing share price of $ 48.69.

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