Is Now the Time for Kandi Tech to Capitalize on Its EV Success?

Kandi Technologies Group Inc. (NASDAQ: KNDI) shares pulled back late in the week when the company announced a registered direct placement offering. This stock has been making moves over the past month, and now seems like as good a time as any to capitalize on the gains.

At the beginning of this month, Kandi received an update from the U.S. Environmental Protection Agency (EPA). Essentially, the EPA granted the required clearance for two of the company’s electric vehicles (EVs) to enter the U.S. market.

More recently, the Chinese EV maker stumbled last week when it reported its most recent quarterly results. However, the stock is up since then.

Now, the firm is offering a registered direct placement of $100 million of roughly 8.50 million units of its securities at a price of $11.30. Each unit consists of one share of the common stock and 0.4 warrants to purchase a share of common stock. The warrants have an exercise price of $14.50 per share, and a term of 30 months.

The net proceeds from the offering are expected to be used for working capital and general corporate purposes, including the research and development of EV sports car models and expenditures necessary to assure that the EV models comply with all necessary requirements for entry into the U.S. market.

The completion of the placement is expected to occur no later than November 24.

Excluding Friday’s move, Kandi has outperformed the broad markets, with its stock up about 205% year to date. In the past six months, it is up closer to 380%.

Kandi Technologies stock traded up about 18% to $11.86 on Friday, in a 52-week range of $2.17 to $17.40. The consensus price target is $12.00.