BEIJING -- Tencent Holdings has increased its direct stake in Nio to 15.1% after acquiring more of the Chinese electric vehicle maker's New York-listed shares recently.
Tencent spent $10 million to buy 1.68 million American Depositary Shares earlier in the month, according to Nio's latest filing with the U.S. Securities and Exchange Commission. The Shenzhen-based social media and entertainment conglomerate also controls another 16% stake in Nio's ADSs through three of its units.
Tencent was the second-largest Nio shareholder in terms of voting rights after Li Bin, founder of the automaker, who held 13.8% in shares but 47% voting rights, according to a March filing by the company.
Thanks to strong sales since April, Nio was able to offset the negative impact of its disappointing first quarter. It sold 68% more EVs from January to May than the same period in 2019.
Nio's success stood out in the coronavirus-hit industry that saw sales declining more than 33% from a year ago.
Earlier this month, Nio raised $428.4 million by offering 72 million new ADSs. The successful fundraising signaled that investor sentiment toward the loss-making company had turned positive.
With its newest automobiles priced almost in line with Tesla's, Nio is considered a premium EV brand in China. After rapid growth in 2018, the New York-listed company announced in December that it needed to raise funds as it did not have enough reserves to continue operating throughout 2020.
In the first quarter of 2020, Nio reported a 50% quarter-on-quarter decline in both revenues and vehicle sales, while net loss narrowed to $238.9 million, thanks to a series of fundraising moves.
In the last quarter of 2019, Hillhouse Capital, which had been Nio's third-largest investor and had backed the company since its Series A fundraising, sold all of its shares.
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