Shares of Nio (NYSE:NIO) are in the green after the company announced plans for a secondary listing on the Stock Exchange of Hong Kong (SEHK). The electric vehicle (EV) company seeks to list its Class A shares on the exchange. Additionally, it has already received a letter of in-principle approval from the SEHK. Upon final listing approval, shares of NIO stock will be tradable under the stock code “9866” on March 10. So, how will this affect shares of NIO stock that are already trading on the New York Stock Exchange (NYSE)?
The listing of Nio on the SEHK will not affect the tradability of Nio on the NYSE. Furthermore, no additional shares will be issued for Nio’s SEHK secondary listing, so shareholders can rest assured that their current shares will not be diluted. Nio has already been in communication with its principal share registrar in the Cayman Islands. The company plans to transfer shares from its Cayman registrar to its Hong Kong registrar at “no additional cost to shareholders.”
In a note to clients, Citigroup analyst Jeff Chung stated that a Hong Kong secondary listing “should largely mitigate the political risks that have concerned the market about NIO in the past six months.”
In addition, Nio has applied for a secondary listing in Singapore in light of geopolitical tensions and delisting fears. A source familiar with the matter stated that Singapore was chosen because of its blossoming EV market. The Singapore Exchange is currently reviewing Nio’s listing application.
So, what else should investors know about Nio’s secondary listing plans and NIO stock? Let’s jump right in.
NIO Stock Secondary Listing Plans: 6 Things to Know
- As part of the SEHK secondary listing, Morgan Stanley (NYSE:MS) and Credit Suisse (NYSE:CS) will act as joint sponsors for the transaction.
- Upon secondary listing approval in both markets, Nio will gain more brand recognizability in Hong Kong and Singapore.
- EV competitors Xpeng (NYSE:XPEV) and Li Auto (NASDAQ:LI) are already listed in Hong Kong.
- However, these two companies pursued a dual-primary listing instead of a secondary listing.
- During Q4, Nio delivered a record 25,034 EVs, up 44% year-over-year (YOY).
- Shares of NIO stock are down more than 30% year-to-date. On top of that, the company has lost over 50% of its market capitalization YOY.
On the date of publication, Eddie Pan 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.