What happened Shares of Chinese electric-vehicle maker NIO (NYSE: NIO) were trading higher on Tuesday, a day after the company announced that a secondary stock offering had priced at a discount. As of 12:45 p.m. EDT, NIO's shares were up about 3.5% from Monday's closing price. So what NIO's shares opened lower on Monday, after the company said that its secondary stock offering had priced at $17, $1.50 below Friday's closing price. That suggested to investors that NIO's bankers might have needed to sweeten the deal in order to sell the shares, but concerns might have been overblown. NIO will begin deliveries of its latest model, the EC6, this month. Image source: NIO. It seems more likely that the banks' investors hesitated because NIO's plans for the proceeds of the offering -- $1.5 billion, roughly -- are a little complicated. Here's the simplified version. Earlier this year, when NIO was nearly out of cash, it made a deal to raise about $1 billion from economic-development authorities in its home province in China, in exchange for a 24.1% stake in its Chinese assets. NIO and the investors created a subsidiary to hold those assets. NIO owns 75.9% of that subsidiary (which it refers to as "NIO China"); the investors hold the rest. In a nutshell, NIO is going to spend roughly $1 billion of the cash raised in this offering to increase its stake in NIO China. About $360 million will go to buy back some of that 24.1% of NIO China from its investors, and the remainder will be cash added to NIO China to boost NIO's stake. (The remainder of the proceeds will go into NIO's business.) Now what If all goes as planned, NIO (and its American investors) will own 86.4% of NIO China, and the company will have roughly $1 billion in new capital -- including the money infused into NIO China, and the remainder of the cash raised -- to spend on its growth plan. That seems clearly bullish for auto investors taking a longer-term view on the company. But it looked complicated at first glance. That's probably why the stock was down yesterday, and why it's rising today, now that investors have had time to read and digest NIO's plan. 10 stocks we like better than NIO Inc.When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and NIO Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of August 1, 2020 John Rosevear has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source