XPeng Crashes to 15-Week Low on Discounted Share Sale

The funds will go to the insider stock sellers of the EV company.
Feb. 24, 2021 01:05
XPeng Crashes to 15-Week Low on Discounted Share Sale

Shares of XPeng (NYSE: XPEV) tumbled to a 15-week low Tuesday on the news insider shareholders are selling off a part of their stakes in the company.

The Chinese electric vehicle giant is offering roughly 10.5 million American depositary receipts priced at $32.25 to $35.75 each, according to Barron's. Based on Monday's close of $38 per share, the stock sale could be discounted as much as 14%.

Barron's notes that XPeng will not receive the capital from the share sale. Instead, the funds will go to the selling parties.

XPeng has been busy in the past 12 months in bolstering up its balance sheet. Ahead of its IPO, the company, backed by Chinese e-commerce giant Alibaba Group (NYSE: BABA) and Hillhouse Capital Management Ltd., raised $900 million. In its public debut in August, XPeng raised $1.7 billion more. In December, XPeng fetched $2.5 billion in a follow-on offering.

EV Stocks Fall on Inflation Fears

Intraday Tuesday, XPeng was trading 8% lower, at $35.13 per share. Its peers, China's Li Auto (Nasdaq: LI) and Nio (NYSE: NIO) watched their stocks drop 7% each intraday. Also, Elon Musk's EV empire Tesla (Nasdaq: TSLA) was trading 4% lower.

Overall in February, EV stocks have slumped. Currently, it appears investors are worried about how Joe Biden's proposed $1.9 trillion stimulus package would impact the economy and inflation. There are fears that prices would rise, while interest rates would spike. That would in turn lead to a decline in high-growth stocks including EVs.

Intraday, the Nasdaq Composite, which tracks many high-growth tech stocks, was down 2% at 13,326.78 points.

This month, shares of XPeng have tumbled 31% to date.

XPeng is expected to release its financial results for the year-end quarter and the full year 2020 before markets open on Monday, March 8.

Alibaba;XPeng;Nio;Tesla;Elon Musk;Li Auto;Joe Biden.