Hey guys, welcome back to another video. Today
we are going to talk about Xpeng Stock and
it’s IPO. Before going to the video don’t
forget to like the video and subscribe as
it helps me a lot.
I’ll start by briefly introducing Xpeng
for those of you who don’t know this company.
So Xpeng or also named Xiaopeng is a Chinese
electric vehicle manufacturer. Founded in
2015 it is one of the biggest names in China,
the biggest EV market in the world. They primarily
target the mid- to high-end segment in China’s
passenger vehicle market. Xpeng is also known
for their full-stack autonomous driving technology,
in-car intelligent operating system and core
vehicle systems in-house. Xpeng has right
now 2 vehicles, the G3 SUV and the P7 sedan,
which competes with Tesla Model 3. The G3
SUV was Xpeng's first vehicle, and went on
sale on december 2018. It’s starting price
it’s about $21,500. It has a range of 249
miles, 400km, or 323 miles, 520km, depending
on the version of the car you get. The P7
sedan it’s Xpeng’s second model and comes
with XPilot 3.0. It has a range of 364 miles,
586km, or 439 miles, 706km, depending on the
version of the vehicle. The company also said
in the SEC filing that is planning to launch
a third vehicle sedan in 2021.
Xpeng went public on 27th august, with an
$1,5 billion IPO. If you don't know what an
IPO is, it refers to the process of offering
shares of a private corporation to the public
in a new stock issuance. Public share issuance
allows a company to raise capital from public
investors. They will also choose an exchange
in which the shares will be issued and subsequently
traded publicly. Why do companies do this?
When a company reaches a stage in its growth
process where it believes it is mature enough
for the rigors of SEC regulations along with
the benefits and responsibilities to public
shareholders, it will begin to advertise its
interest in going public. An IPO is a big
step for a company. It provides the company
with access to raising a lot of money. This
gives the company a greater ability to grow
and expand and The increased transparency
and share listing credibility can also be
a factor in helping it obtain better terms
when seeking borrowed funds as well.
So going back to Xpeng stock, they said Thursday
that it sold more than 99.7 million shares
for $15 each in its Wall Street debut, raising
about $1.5 billion. It had originally planned
to sell 85 million shares priced between $11
and $13. So this is a positive sign for Xpeng.
Xpeng is trading in the NYSE under the ticker
XPEV and closed it’s first day on the exchange
market at about 21$ per share.
Now my thoughts about the stock, I think it
has a great potential for growth, as the whole
EV segment. Being in the biggest EV market
in the world can also help a lot Xpeng escalate
it’s business and because of the entry in
the US market, it also gained a lot of visibility
in other markets, besides the Chinese one.
Their XPilot technology needs to be taken
in consideration as it looks like a direct
competitor to Tesla Autopilot technology.
And they also have Alibaba as an investor,
which is great because they are a big company
with strong financial capacity.
Despite thinking it has a great potential,
you should be careful because their financials
are not brilliant. As you can see Xpeng in
the end of 2019 had about $275 million of
cash and cash equivalents, and in 30 June
2020, this value is only $150 million, this
is like a red-light blinking for investors
telling them to be careful as they had a big
loss on cash.
The trade war between the U.S. and China and
subsequent tariffs could also hit Xpeng, so
you should be careful about that. Another
thing that also doesn't give me a lot of confidence
in Xpeng, is the fact of being a Chinese company,
and that’s not a negative thing, but it
is for me because I don’t understand a lot
about chinese stocks and chinese markets.
The scandals that happened in China, like
with Luckin Coffee, that if you don’t know
were involved in a fraud with fake sales.
And Luckin Coffee is the largest coffee chain
in China. This does not mean the same will
happen with Xpeng, but is just a fact you
need to consider when thinking of investing
in Xpeng.
To add Xpeng is also being accused of copying
Tesla, from it’s design on the P7 sedan
that is similar with the model 3 from Tesla,
and even to have hired former employees of
Tesla who were accused of stealing Tesla’s
autopilot source code. In my opinion this
shows that they don’t have their own goal,
their own purpose or even creativity which
in my opinion is a big NO for Xpeng.
To finish I want to say that this is a company
I'm not invested in and am not thinking of
investing for now, but who knows, I can change
my ideas about it and I'll make an update
video telling you.
This is all for today, hope i was able to
help you decide if this is the right company
to invest. Comment with you thoughts about
this stock and don’t forget to subscribe
to the channel and hit that bell button bellow!
See you!
