Li Auto (NASDAQ:LI) is taking a beating on Tuesday after the electric vehicle (EV) company revealed plans to sell $2 billion worth of its stock.
According to a press release from Li Auto, it will sell up to $2 billion in American Depository Shares (ADS). These shares will represent two Class A ordinary shares of the EV company’s stock. The plan is to sell these through an at-the-market equity offering program.
Li Auto will sell these shares at its own discretion. Offering the shares are Goldman Sachs, UBS Securities, Barclays Capital and China International Capital Corporation Hong Kong Securities. The sales will be available to U.S. investors as well as select traders overseas.
So what does Li Auto plan to do with the funds from this share offering? The company says the funds will go toward research and development for its next generation of EVs. That includes new EV platform development as well as autonomous vehicle development. The company will also use the money for general corporate purposes.
It’s worth mentioning Li Auto announced this share sale shortly after reporting order numbers for its new Li L9 EV. The company saw more than 30,000 orders filled for the EV in just three days since opening them.
LI stock is seeing heavy trading following today’s stock offering news. As of this writing, more than 19 million shares of the stock have changed hands. That’s above its daily average trading volume of about 10 million shares.
LI stock is down 5.8% as of Tuesday afternoon.
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On the date of publication, William White did not have (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.