#47 (EN): IPO Review, Investor Relations Website, SVC3

Have a nice Sunday! After almost four weeks of "quiet period" due to the IPO, we are finally continuing with the little unofficial Sono community blog!

And because it is all about the IPO today some words of advice: This is not a recommendation to buy or not to buy any shares. Everyone is responsible for their own actions. This blog is for reservation holders of the Sion vehicle, the community that has sparked and initially funded the Sion operation.

+++ SUCCESSFUL IPO +++

Sono is now listed on the NASDAQ stock exchange! A reason to celebrate, because now Sono can proceed to the next steps of series production. 

172.5 million dollars gross proceeds, all shares offered have been sold, the reserve as well ("Greenshoe"). If you want to know more details, here is an interview with Torsten, the CFO of Sono Motors. He managed the process very confidently, huge respect. 

https://sonomotors.com/de/blog/community-advisor-sebastian-poses-the-most-important-questions-about-going-public

As a listed company, there is now also a special page at Sono for "Investor Relations", which can be found here: 

https://ir.sonomotors.com

But one after the other. Let's start where it all left off. The day the IPO was announced four weeks ago:

+++ October 22: NASDAQ filing +++

After months of preparations, Sono announces with a small press release that it has filed for a listing on NASDAQ, the "F1" Filing. PricewaterhouseCoopers (PwC) has pre-audited and certified all documents. The documents will be reviewed by the SEC (U.S. Securities and Exchange Commission) after filing. 

https://sonomotors.com/de/press/press-releases/sono-motors-files-registration-statement-for-proposed-initial-public-offering/

https://www.sec.gov/Archives/edgar/data/0001840416/000110465921128923/tm212911-7_f1.htm


The application is available for public inspection, has several hundred pages and gets the process to being listed rolling. This makes the company maximally transparent, so that every investor also knows what he is getting into.

+++ October 26: price increase +++

The filing also stated that the price of the Sion will be increased. For all existing reservations, however, the price remains the same. Keeping the price the same for existing reservers was not an easy decision from an economic point of view, but (let me say as a community advisory board member) it was of course the only right thing to do. 

The information about the IPO has led to the fact that some have dared to reserve a Sion who have hesitated so far. Over 1000 new reservations in less than two weeks. Of course, the announced price increase has also fueled the "rush". I also know some who had already canceled their reservation - and are now back.

https://twitter.com/SonoMotors/status/1452998960210133002

+++ November 08: Update - Number of shares +++

The first F1 document does not yet contain exact information on how many shares will be issued - and it does not have to, for the first review. On November 8, Sono uploads the supplemental F-1/A form. In this form, the number of shares to be placed (10 million shares) is specified. 

With the F1/A, interest starts on some trading platforms: Youtubers and influencers draw the first buy options live. You don't get anything yet, but they hope to get shares at the issue price at the start of trading. The first one I found was "No Pants Profits", who spent 45 minutes digging through the documents in detail, and then ordered 100 shares with a limit of 19 dollars 20 per share. Others have followed suit. 

https://youtu.be/5kNp75MEXP8?t=2565

Later, by the way, he reduced to 1 (!) share shortly before the IPO. The reason was: There is a "30 days flipping policy" on the platform. You are allowed to sell the shares at any time - but if you sell fresh IPO shares before 30 days are up, you get a malus and possibly no allocation next time. And he fears that something will happen at Evergrande in the next 30 days, and thus at NEVS - and that could drag the Sono share price down, below the launch price. It will be exciting to see what happens in four weeks when the flipping lockup opens up.

https://www.youtube.com/watch?v=Fjp5NwwlbZI

Many will now think to themselves "what, how did he already place orders on November 8th?" Why didn't anyone tell me?". No one told me either, I found it via my "Sono Bot" which collects everything that comes up about Sono on the net on a daily basis. As a community advisor, I am not allowed to buy shares anyway, but it was still a warning for me: there are people on the stock market who are much more into details than casual investors. They do this kind of thing every day and know which trading platforms offer what. Some have also asked why Sono didn't have a quota for the reservation holders in advance, that's not allowed. Everyone has to be treated the same in an IPO. But there will probably be more info on that at the Q&A on Tuesday.

+++ 11/16/2021 - RELEASE +++

The SEC gives the green light: Form CERT is issued by the SEC and the number of shares is released for trading. Sono is now allowed to offer its shares on NASDAQ - and doesn't fidget for long.

https://www.sec.gov/Archives/edgar/data/0001840416/000135445721001341/8A_Cert_SEV.pdf

+++ 11/17/2021 - START OF TRADING +++ 

Trading starts at 09:30 local time (New York) - 15:30 our time. Sono stock is issued for $15, and shoots up to $38 - on the very first day. Sono can not care about the rise, the money comes in the moment they sell the shares. You have to imagine what some people, who never had anything to do with Sono before, make for a cut right at the beginning. Bought for 15, sold for 38, on the same day.

Some have criticized that Sono did not collect the entire sum that is needed for the project. There is a reason for this - the source is page 70 in the F1 filing, where it also says that the money will last until around May 2023 and that it will then have to be topped up by then again. But it also says how it will continue, Sono has several options to choose from, among others:

  • Issuing new shares

  • Taking out loans

  • Advance payments from reservers who have been offered a purchase agreement

For the first case, Sono already has a number of shares up its sleeve to raise more money (page 162). And Sono can decide for itself whether and when to issue them.

https://www.sec.gov/Archives/edgar/data/0001840416/000110465921141230/tm212911-16_424b4.htm#tCSEF

+++ 11/18/2021 - RINGING THE BELL +++

The first trading day was a complete success, all shares were sold. The next day, Sono was allowed to "virtually" open the stock exchange, "Ring the Bell". A 20 minute video ran in Times Square for this, which you can still watch here (not much happens for the first 11 minutes).

https://livestream.com/accounts/27896496/events/9904188

Laurin and Jona currently hold about 78% of the voting rights, also thanks to some golden shares ("High Voting Shares") with multiple voting rights. So there is no danger that the store will be taken over.

https://sec.report/Document/0001104659-21-141230/

+++ WHAT HAPPENS NEXT? +++

Three major milestones have been checked off this year by Sono:

  • Timeline updated (2023)

  • Sion specs updated to match 2023 competitiveness, including a larger battery pack.

  • Financing secured

Going public is a mission. Many investors like the SEV idea - Solar on Every Vehicle - and want the Sion to make it on the road. Sono now has 18 months of hard work ahead of it. Every day counts. Now the pre-series vehicles have to be built in Trollhättan, and they have to last and go through various tests.

Three big steps now await Sono - and us as a community that is rooting for them:

  • Pre-series production in Trollhättan,

  • "Production hell" - the transition to series production. Tesla has shown that this can be very adventurous. Tesla, however, has had to completely build its own plant. Sono wants to fall back on NEVS, including the personnel know-how available there. This also involves risks, and the question you often ask about fallback levels is certainly not unfounded.

  • Ramp up Sales & Service. - always a challenge without an existing dealer network

In any case, I am looking forward to the exciting steps ahead. 

+++ EMOTIONAL MOMENT +++

The reservation of the Sion is not cancelable at any time, but only at the end of terms. 11 % of the reservers still have the old contracts and can "get out" at any time if they want to. 20% can get out at the end of the year. Most have 2023 in their contracts.

Some reservers were very unsettled by the reports of some portals about the "imminent bankruptcy without IPO" and absolutely wanted to "get out" early for fear that the money is gone. Some had even recommended the Sion to their neighbors and feared for their friendship. Especially since the story was told when pre-orders were already drawn on RobinHood and you could watch it live on Youtube how the demand was building up. I think even the neighbors are satisfied with the result now. Who can claim to have supported a startup on such a journey so early. 

Source (Percentages) - p.81: https://www.sec.gov/Archives/edgar/data/0001840416/000110465921128923/tm212911-7_f1.htm



+++ FUN FACT +++

Sono shot a video in the Eisbach studios for the IPO, showing in four minutes the way from the garage to the first trading day. In the scene with the "50 days - 50 million" wall", everyone had a lot of trouble staying serious: the task was to stack the 25 elements in the right position in the 20 seconds - while Laurin and Jona were talking. After each take, there was the anxious question of what would now be in front again, because there was always a stone in the wrong position. Sometimes there was just someone standing around with a 0 in his hand. You can see it at minute 2:19, where first Jonah turns around and then Laurin and both grin with relief - everything fit.

https://youtu.be/9MlQMG5S-_o?t=122


And here we are now. Last week was IPO, next week will focus again on the vehicle. Time is ticking now to get things moving.

Have a nice week, stay healthy. 





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