Electric-car maker BYD sells $3.9 billion in stock after Tesla-led rally quintuples prices
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BYD - the Chinese automaker backed by legendary investor Warren Buffett - sold $3.9 billion in shares after outsized demand for electric-vehicle stocks saw the firm's valuation explode through 2020.
The company offered 133 million shares for HK$225 each ($29.03) on Wednesday, representing 14.5% of its Hong Kong-listed stock. The sale was initially set to include 122 million shares priced between HK$222 and HK$228, according to documents seen by Bloomberg. The final offering price represents a 7.8% discount to BYD's closing level on Wednesday.
BYD shares soared more than 400% over the past 12 months as investors doubled down on the EV sector. Tesla saw the bulk of the inflows, but competitors including BYD, Nio, and Kandi also benefited. BYD now boasts a market cap of roughly HK$717 billion ($92 billion).Demand for BYD's offering handily surpassed the increased supply, The Wall Street Journal reported. Hedge funds, institutional investors, and Chinese funds participated in the sale.
While several EV companies have tapped publicBYD aims to use proceeds from the sale to pay off debts and strengthen its position in China's burgeoning EV market. Sales of electric cars surged in 2020 as China's government pushes to become carbon-neutral over the next four decades. Where China represented just 5% of global EV sales in 2011, that share reached 50% in early 2020.
BYD closed at HK$248.40 ($32.04) on Wednesday. Now read more markets coverage from Markets Insider and Business Insider:US stocks climb amid optimism around Biden's COVID-19 plan and stimulus push
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