Chinese electric vehicle startup Li Auto priced its initial public offering Wednesday evening. Share opened for trading Thursday, and they are up a lot. It confirms at least one thing: EV stocks remain hot.
Li Auto (ticker: LI) priced its public offering at $11.50 per ADR, short for American depositary receipt, a security used by foreign companies listing in the U.S. That’s above the $8 to $10 expected range.
The capital raise will bring about $1 billion into company coffers.
The new security opened for trading a little before noon at $15.50 a share, up 35%. Shares are trading at about $16.80 in midday trading Thursday, up about 46% from the IPO price and up about 9% from initial trades.
The current price gives Li a market capitalization of about $14 billion. That’s close to the market value of NIO (NIO). NIO, however, is a larger auto producer.
NIO is delivering, roughly twice as many vehicles as Li over the past few months. In fact, Li stock now trades at a premium to NIO—and very close to Tesla (TSLA)—when looking at market value, including debt, per car delivered.
Investors, these days, are valuing EV makers at, very roughly, $1 million per delivery.
Li’s strong stock performance out of the gate puts it firmly in the EV stock club. EV stocks Barron’s tracks—including Tesla and NIO as well as Nikola (NKLA) and Workhorse (WHKS)—are up about 240% year to date on average, far better than comparable returns of the Dow Jones Industrial Average and S&P 500 over the same span.
Li, like many others, has its own take on EVs. The company makes extended-range electric cars by including a small engine which can be used to recharge batteries.
Write to Al Root at allen.root@dowjones.com
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July 31, 2020 at 01:05AM
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