The recovery in value of several well-known electric car companies could help bring non-private EV manufacturers from the pit lane onto the IPO route.
After the shocking growth in value of NIO after the latest earnings report and the IPO carried out by Tesla, the Chinese company Lixiang Automotive is said to have privately applied for an IPO in the USA.
Lixiang Automotive are a Beijing-based company that was founded in 2015, according to Crunchbase data. The company has raised more than $ 1 billion in the private sector and is said to be worth almost $ 3 billion. It has recently raised a $ 530 million round led by Xing Wang, Meituan-Dianping's fame.
It wouldn't be the first Chinese EV company to go public in the U.S., as NIO did the feat in 2018. However, the reported submission shows that the players and bankers of the alternative car market have confidence in the mood of investors again.
To understand the news, we will look at the latest happenings from Lixiang's public colleagues first, and then examine the company itself.
A month ago, the Lixiang Automotive confidential IPO filing would appear quixotic. After all, the closest comparable market was flirting with penny stock status.
NIO was in the tank more than a year after an IPO that was anything but smooth. After the IPO at $ 6.26 per shareHer equity had traded down to almost the $ 1 point, a 52-week low on the frightening number of $ 1.19 a share. However, since then, stocks of the unprofitable, empty box office EV manufacturers have recovered, trading for $ 3.84 a share today. Still lower than IPO price, but more than 200% higher than recent lows (more than tripling in value).
This has probably cleared the way for Lixiang Automotive, albeit privately. Reuters has spread the news about the stock market outlook.
Tesla's rise also helped. After some strangely chilled normal (for Tesla) drama, the company's stock has come a long way. From 52-week lows of $ 176.99, Elon's automaker is now worth $ 445.25. Tesla's stocks are 150% above their lows, double the market capitalization. Investors appeared to find his earnings and delivery sums (and advances on the Chinese factory) encouraging.
For Lixiang Automotive, the moves that US stock markets showed warmed up waters worth testing. Since it is certainly unprofitable, the opening of a new financing avenue was welcome.
Similar to NIO's IPO, the company will make its debut while the history of actual car delivery is in the making. NIO went public and delivered hundreds of cars. The company noted at the time that it had commits north of 10,000 for its cars. In the early days of its IPO I wrote that the company's limited history of generating sales made its stake a gamble.
Lixiang is expected to go public at a similar level of immaturity. After Equal Ocean, Lixiang is now delivering cars, although it only started shipping them last month:
Chinese electric vehicle maker Lixiang Automotive, formerly known as CHJ, has announced that its EV project, 'Lixiang ONE 2020', is officially mass-produced at the Changzhou factory and will begin mass delivery in early December.
The pre-sale for the car also took place in the fourth quarter of 2019, which means that the company's sales before the fourth quarter of 2019 should be very slight.
If Lixiang successfully goes public, it shows that the company's maturity is not a prerequisite for an IPO. If we see Lixiang's F-1 filing, we won't see the story of a company with an obvious path to profit in rapid growth – we'll see a deeply unprofitable company in the early stages of material revenue.
A short time ago I would have given such a slim chance of success. But with NOK on the bounce and Tesla back on shape, who knows?