- The stock price of Kandi Technologies Group Inc (NASDAQ: KNDI) fell 16.31% on Friday, November 20. This is an explanation of why it happened.
The stock price of Kandi Technologies Group Inc (NASDAQ: KNDI) — a Chinese battery and electric vehicle manufacturer — fell by 16.31% on Friday, November 20. One of the biggest triggers for the drop in price was an announcement about a securities purchase agreement with certain institutional investors for a registered direct placement of $100 million of 8,849,560 units of its securities at a purchase price per unit of $11.30. The $11.30 purchase is 22% below the closing share price of $14.41 on Thursday, November 19.
Kandi Technologies said that the net proceeds from the offering are expected to be used for general working capital purposes, including research and development of EV sports car models and expenditures necessary for assuring that its EV models comply with all necessary requirements for entry into the U.S. market.
This is the second offering this month that was announced by Kandi. Recently, the company offered securities at $6.38 per share in order to raise $60 million.
It’s worth mentioning that Kandi Technologies rallied during the past week. Over the past week, the stock price increased 59.95% from $7.54 per share on November 16 to $12.06 as of Friday, November 20.
The sell-off seems to be an overreaction as the additional funding could help the company substantially grow in the long-run as it further penetrates the U.S. market. Currently, Kandi has a subsidiary in Texas called Kandi America.