Zeekr (NYSE:ZK), a Chinese maker of luxury electric vehicles (EVs), holds its IPO today with an initial price of $21 per share.
The price is at the top of the expected range. It indicates strong demand for the 21 million American Depository Receipts (ADRs) being offered. Zeekr filed an F-1 document with the Securities and Exchange Commission (SEC) early this month.
However, the most important thing for many to know about Zeekr is that Zeekr is not the story here.
Zeeker Is Another Geely Joint
Zeekr is yet another spinoff from Geely (OTCMKTS:GELYY), a Chinese maker of both gas-powered and electric cars. It’s the second to be traded in New York after Polestar (NASDAQ:PSNY). This was itself spun out from another Geely-controlled brand, Sweden’s Volvo (OTCMKTS:VLVLY).
Zeekr is competing with Tesla (NASDAQ:TSLA) at the high end of its range with the Zeeker 001, a wagon-shaped crossover inspired by the Porsche (OTCMKTS:POAHY) Panamera. It uses the same platform as the Polestar 4.
By using multiple brands (with multiple stocks), Geely can deliver a wide range of EVs. This includes the Panda line of mini-EVs priced from $5,500 to $7,500. It also includes the Galaxy E5, which competes with the Volkswagen (OTCMKTS:VWAGY) ID.4.
Not everything Geely touches turns to gold. Geely itself was late to the EV market and now badly trails BYD (OTCMKTS:BYDDY) overall. It’s also still innovating on engines, including hydrogen engines.
Polestar has delayed releasing financial results twice in the past year due to accounting problems. Geely also raised cash recently by selling $1.3 billion worth of Volvo shares.
Geely is doing deals to buy innovation it doesn’t have in-house. This includes a recent deal with Nio (NYSE:NIO) covering battery swapping. It also includes one with an Israeli start-up on autonomous driving.
ZK Stock: What Happens Next?
Geely has many moving parts, of which Zeekr is just one. This can make it hard for investors.
In the Zeekr IPO and ZK stock, you’re just buying one piece of a giant company that will make 3 million cars this year. Whether Geely remains committed to Zeekr, as with Volvo, will always be unclear.
On the date of publication, Dana Blankenhorn 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.
