XPeng sells shares. But not to raise more money.

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The Chinese manufacturer of electric vehicles

XPeng

is selling shares, but not to increase additional growth capital. This is a secondary stock sale in which some early investors withdraw money from the table.

On Tuesday, it was reported that XPeng (ticker: XPEV) will offer about 10.5 million U.S. deposit receipts, or ADRs, between $ 32.25 and $ 35.75 per share, depending on where the broker handling the large block of stock can set the price.

Each XPeng ADR represents two common stock actions.

Shares of XPeng closed at $ 38 on Monday. Big blocks usually have a discount in the market because it is difficult for brokers to sell many stocks at once. Approximately 15 million XPeng shares are traded per day, so 10.5 million is a significant amount to add on a given day.

The sale of shares is approaching as a blockade of sales related to XPeng’s initial public offering. Investors and early investors are often prevented from selling shares of a public company recently for a period, typically 180 days. The XPeng IPO tool was installed in late August, about six months ago.

Shares of XPeng fell about 21% in February. Shares in Xpeng colleagues

Read Auto

(LI) i

NIO

Shares (NIOs) have fallen closer to 10% during the month, as have shares of China’s largest rival, Tesla (TSLA). It appears that investors were selling some shares before the maturity of the stock market closing.

Shares of XPeng fell 6.6% in premarket trading to about $ 35.50. Shares of NIO and Li were also lower. Shares of Tesla fell nearly 5%, to $ 680. It traded briefly at about $ 650 on Tuesday morning, the price at which Tesla shares entered the S&P 500 in late December.

It cannot be blamed on the secondary sale of the total fall of XPeng or the rest of Chinese stocks. US stock futures have fallen and stocks with high growth are increasingly affected. Futures on the

Nasdaq Composite,

which houses many high-tech tech stocks, fell about 1.5% after the index fell 2.5% on Monday.

Fears of inflation appear to be the catalyst for the sale. Investors are worried that any stimulus from the government pumping into the economy will lead to higher prices, an overheating economy and, ultimately, higher interest rates.

High-growth stocks, such as those in electric vehicle companies, tend to fall sharply as interest rates rise. High rates make investors re-evaluate what is to be paid for growth. Why invest in something that generates cash flows and pays dividends far away when there are options to generate investment income?

Write to Al Root at [email protected]