Chinese fast-growing electric vehicle maker Li Auto kicked off trading on July 30 on the Nasdaq Global Market with its share price soaring 43.13% from its IPO price of $11.5.
The company’s stock price closed at $16.46 with a $13.9 billion market cap, approaching its local rival NIO’s $14.45 billion. Li Auto’s share price once reached up to $17.5 in the intraday market, an increase of nearly 50% from the issue price, with its market valuation exceeding $14.8 billion.
Pandaily reported this week that Li Auto’s prospectus issued on July 25 indicated existing shareholders have agreed to purchase $380 million in Class A ordinary shares from the company through private placement. Excluding the underwriters’ oversubscription for an additional 14.25 million ADSs, the total amount of funds raised by Li Auto in the IPO and concurrent private placements will be $1.47 billion, surpassing NIO’s $1 billion IPO debut on Wall Street in September 2018.
According to Chinese business media outlet IPO Zaozhidao on July 30, before Li Auto’s IPO, Li Auto’s Founder and CEO Li Xiang held 25.1% of shares and 70.3% of voting rights. Wang Xing, CEO of China’s food delivery giant Meituan, personally held 8.9% of shares and 3.5% of voting rights. After the IPO, Wang and Meituan will jointly own 24% of the shares, surmounting Li’s 21%. Li still holds 72.7% of voting rights while Wang and Meituan have 8.3%.
Meituan, which is already the largest backer in Li Auto, agreed to purchase 300 million Class A common stock, and China’s tech giant ByteDance agreed to purchase $30 million, Li Auto said in its prospectus. The two co-founders of Meituan, Wang Xing and Wang Huiwen, will each in their own names purchase $30 million and $20 million ordinary shares.
After the launch of the IPO subscription, Li Auto’s ADSs were fully subscribed with clipping speed. The company later priced its 95 million American depositary shares at $11.5 per ADSs, exceeding the capped price of $10 offered in its prospectus, which directly led to the predated official listing originally scheduled for July 31.
Wang Huiwen said on her WeChat Moments on July 29 in a mocking tone that more people were approaching her in hopes of obtaining more Li Auto IPO shares than that of Meituan.
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Vang Ly, the Managing Director of Snowball, one of Li Auto’s underwriters, said in a news release that participating investors will be pleased with Li Auto’s first-day performance. He further added that the company recognizes Li Auto’s competitive feature that allows drivers to charge their vehicles with electricity or gasoline, and sees potential through its future R&D investment in the ramp-up production of Li ONE and other new products.
“Our decision to participate in the underwriting of the Li Auto IPO meant our clients had access to investing in this exciting and fast-growing Chinese company.”