Evergrande Auto supplies itself with fresh money on the stock exchange at the start of production. Sono Motors wants to (or has to) do the same and is aiming for an IPO. However, the situation of both companies cannot be compared with one another. Hengchi 5 is already in the starting blocks, but Sono Motors' Sion still has a long way to go.
Act 1. Fresh money from the stock exchange. Evergrande car.
Evergrande Auto is already listed on the stock exchange (HK 0708). Evergrande Auto announced yesterday that it would place 174.83 million new shares at a discount of 18,89% to the previous day's closing price. The volume corresponds to 1,76% of the capital and will flush HK $ 500 million (approx. € 55,5 million) into the company's coffers. The fresh funds are needed to start production, which is scheduled to start in January.
The stock exchange responded in a friendly manner to the announcement and the share closed trading with a slight gain. The positive trend continued today. According to information from circles close to Evergrande, which has not been officially confirmed, pre-production of Hengchi 5 at the Tianjin plant has already started.
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Act2. Fresh money from the stock exchange. Sono Motors
Like Evergrande Auto, Sono Motors also wants to raise money on the stock exchange. However, things are completely different here, the Sion is still at least 1 year away from production. In addition, in contrast to the factory in Tianjin, the NEVS plant in Trollhättan is everything but not ready to start production.
The planned initial public offering includes 10 million common shares to be placed at a price between US $ 14 and US $ 16. Sono Motors would collect a maximum of US $ 160 million, not particularly lavish, in order to build up production, homologation and the start of the pilot series. The company's valuation would be $ 1,15 billion. In addition, the Munich-based company can sell another 30 million shares at the offer price within 1,5 days of the IPO.
Sono Motors currently has 16.000 pre-orders on the books, the value of which is only revealed when it comes to binding sales contracts. Because many contracts are already older. The story of the Sion is no longer fresh, the start of production has already been postponed several times. Not a good story for the stock marketers, because an older electric car concept is about as popular as a smartphone from 2016.
Although Sono Motors is only concerned with a relatively small amount, the competition is showered with billions on the US stock exchanges, the question is how well the IPO is received. Because in Stock exchange prospectus the imminent bankruptcy risk is pointed out several times, without fresh money the company would probably be insolvent in December.
This leaves the question of how speculative the stock really is and whether investors want to hook the rather narrow valuation.