A large interest payment is due Feb. 1, but Nio will probably go out of money ahead of time
Many reports arrived on the scene on Wednesday, Jan. 15 that Nio had raised $1 billion in funding from Guangzhou Automobile Group (OTCMKTS: GNZUF ).
Nevertheless, on Thursday, the South Asia Morning Post stated that Guangzhou Automobile had verified so it would possibly spend as much as only $150 million in Nio.
Nio Is Starving for Money
Nio’s report that is third-quarter released on Dec. 30, ninety days following the end of its matching quarter. The report shows Nio’s cash position was right down to just $274.3 million.
But on June 30, 2019, Nio had $503 million in money and assets readily available. This means Nio lost $228.7 million when you look at the 3rd quarter.
And so the business cannot manage to continue burning through such considerable amounts of cash.
Through the third quarter, Nio burned through $228.7 million. Additionally the business likely burned through the same quantity within the 4th quarter.
Will $150 Million Really Assist Nio?
Nio is going to need to raise a lot more than $150 million to be able to endure. We estimate that by Dec. 31, 2019, the business had $45 million or less readily available
Why do i do believe therefore? Here’s just exactly what Nio said about its cash balance when you look at the report december:
“The business operates with continuous loss and equity https://speedyloan.net/installment-loans-nd that is negative. The Company’s cash stability is perhaps not sufficient to give the necessary working capital and liquidity for continuous procedure within the next year. The Company’s operation that is continuous relies on the Company’s capacity to obtain enough outside equity or debt funding.”
The report additionally stated that it’s “working on a few financing projects” and will announce any developments whenever appropriate.
Therefore this is actually the issue. By Jan. 31, at a level of $229 million per quarter, Nio will burn off through another $76 million.Continue reading