Data Sheet—Why It’s Way Too Soon for China’s NIO to Go Public

These are exciting times. Wednesday brought news that a long-in-tooth startup, SurveyMonkey, wants money from investors despite its lackluster results. Around the same time a barely three-year-old Chinese electric car maker called NIO also filed to go public. It, however, is attempting to raise even more cash despite having accomplished almost nothing at all.

Amusingly, NIO’s Chinese name translates into “blue sky coming,” according to the company’s securities filing. That’s appropriate because NIO’s promise to investors is all blue sky—and little else. The company shipped its first car last year and to date has delivered just under 500 of them. [Note: not a typo. Five hundred is the right number.] NIO rang up sales of $7 million in the first half of the year while losing half a billion dollars. [Again, not a typo.]

In other words, NIO is to Tesla what Tesla is to any established car marker: a bright, shiny object masquerading as a real company.

NIO’s attempt to raise more than $1 billion is reminiscent of the dot-com bubble of nearly two decades ago. Back then frothy new companies offered regular investors the opportunity to pretend to be venture capitalists. They too could throw down on startups with no track records. Things generally didn’t go so well.

NIO is nothing if not ambitious. “We believe that improved smart electric car technologies, coupled with better experience of car ownership, will drive increased appreciation and adoption of smart electric cars, leading to the fulfillment of our vision of blue skies and a more sustainable future for our planet,” its CEO writes. It also counts heavyweight investor Hillhouse Capital and Internet giant Tencent as backers. (The two own nearly a quarter of the company.)

NIO’s offering document is notable in other ways. I can’t remember seeing a longer list of “risks,” from geopolitical concerns to its own inexperience to a complicated capital structure. It also contains page after page of fascinating information about the Chinese automotive market, none of which changes the fact that NIO hasn’t yet shipped 500 cars.

Capitalism is a glorious thing, as are transparent capital markets. Investors are free to gamble on unproven upstarts, just as there’s nothing stopping them from pulling the arm on a slot machine in Vegas.

NEWSWORTHY

Busy, busy bees. As Adam mentioned, NIO is looking to go public and it will have plenty of company from other tech companies, it appears. Lyft has hired advisers to help take the company public in March or April 2019, Bloomberg reports. Chinese consumer lending company X Financial filed to go public in the United States to raise $250 million, while Chinese smart home appliance maker Viomi Technology (which is backed by Xiaomi) filed to raise $150 million in a planned U.S. IPO. And the gay-oriented dating app Grindr is also in the early stages of an IPO.

Do the right thing. What's that amazing Gandhi quote, be the change? Fully: "Be the change that you wish to see in the world." That's what I thought of when Microsoft announced on Thursday that it would start requiring all of its "substantial" contractors and suppliers with 50 employees or more to offer at least 12 weeks of paid parental leave. "It’s a good opportunity for us to be able to focus our resources on doing business with companies that share similar core values with us," general counsel Dev Stahlkopf tells GeekWire.

Blocking blocking. Staying out west, California's State Assembly voted to adopt strong net neutrality rules. The bill next goes to the State Senate and then to the governor–both are expected to approve it. You may recall that telecom interests gutted one version of the proposal in June, but lawmakers last week went back to their original concept, which is based on the Federal Communications Commission's now-revoked 2015 rules.

Likable. It was kind of easy to guess this year, but on Thursday Apple confirmed that its annual iPhone event will take place on Sept. 12. This was accompanied by the unprecedented leaks of apparently internal Apple photos and specs of the new phones and watch (don't click to avoid spoilers). But Apple still has the capacity to surprise, including perhaps by lowering some prices. Or not: Apple investor Warren Buffett told CNBC he thinks the iPhone is "enormously underpriced," adding he'd rather up give up his private jet than his iPhone.

Mix and match. In other shiny gadget news, pictures of Google's upcoming Pixel 3 phone leaked. And at the IFA show in Berlin, Lenovo updated its laptop line with a boost to its top of the line X1, a high-priced Chromebook, and an e-ink keyboard model. Harman Kardon showed a smart speaker with Amazon's Alexa and a built in Wi-Fi mesh router from Netgear.

Live sea scrolls. Speaking of cool gadgets, scientists at Queen’s University’s Human Media Lab in Kingston, Ontario, have made a tablet-like computing device with a screen that scrolls, kind of like a papyrus scroll from ancient Babylon. Dubbed the MagicScroll, the prototype has a 7.5-inch flexible screen that rolls out from a sort of bulky cylindrical base. The idea ultimately is to get the hardware base down to the size of pen, so it could fit easily in a pocket.

FOR YOUR WEEKEND READING PLEASURE

A few longer reads that I came across this week that may be appealing for your weekend reading pleasure:

The Untold Story of Notpetya, the Most Devastating Cyberattack in History (Wired)
Crippled ports. Paralyzed corporations. Frozen government agencies. How a single piece of code crashed the world.

The Dwarf, the Prince, and the Diamond in the Mountain (The Cut)
An unlikely fable, in which Birkenstocks become cool and double sales overnight.

Money for Nothing (The New Republic)
Many jobs are pointless. Others are being automated away. In the future, who will still work for a paycheck?

The Wild Alaskan Island That Inspired a Lost Classic (Atlas Obscura)
Rockwell Kent did not know where he would live in Alaska when he arrived in 1918. His intention, if it can be said that he had one, was to find a place apart from other people, and to paint. From Seward, a town full of men who had come north in search of gold, Kent and his young son—also called Rockwell—took a small boat into Resurrection Bay, where a chance meeting led them to an empty cabin on a small, wooded island.

FOOD FOR THOUGHT

Attacks on tech companies from the White House have been getting louder and more frequent. This week, President Trump falsely accused Google of ignoring his State of the Union address, amid a bevy of other threats and inaccurate accusations. Longtime tech journalist and new New York Times contributing op-ed writer Kara Swisher had an on-target rebuke that's well worth reading in full. A taste:

So whether it’s the idea that Twitter “shadow bans” right-wing conservatives or that Facebook and YouTube have made a left-leaning decision that a vile and mendacious actor like the Infowars conspiracy theorist Alex Jones perhaps needs to be thrown off services for his vile and mendacious behavior, it’s all codswallop.

You can look that fine word up on Google if you want to know what it means, by the way. That is also where you can also reach every single conservative, alt-right and white nationalistic site in a millisecond. And Google is just one platform of so many that have allowed every one of those voices to thrive and proliferate in untold—and in some cases, dangerous—ways.

IN CASE YOU MISSED IT

Lyft Riders Donate $1 Million to Girls Who Code By Natasha Bach

Why We'll Want AI to Help Us When the Big One Arrives By Lucas Laursen

Amazon Market Value Nears $1 Trillion as Shares Cross the $2,000 Milestone By Kevin Kelleher

In Major Nod to Privacy, Mozilla to Turn Off Data-Tracking in Firefox Browser 'By Default' By Jonathan Vanian

San Francisco, Santa Monica Allow Electric Scooters in New Pilot Programs By Brittany Shoot

Tencent Holdings Burns Billions in Regulatory Holding Pattern Over Video Games By Lucas Laursen

China's Tencent Folds Yet Another Video Game Company Into Its Empire By Chris Morris

BEFORE YOU GO

The zillion dollar Chiron supercar made by Bugatti is pretty cool. And Legos are cool. Put the two together and you get a life-size, drivable Bugatti Chiron made entirely out of...Legos. Top speed of an actual Chiron: 260 miles per hour. Lego version: 12 mph. Maybe don't try passing on narrow, windy roads?

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.