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Shares of The9 take a dive after $600M partnership with Faraday Future

The internet company and electric-auto maker launched a joint venture to sell cars in China

Faraday electric car
Last year, a deal between Faraday and a previous partner broke down

The9 Limited (NASDAQ:NCTY) announced a joint venture late Friday with embattled electric-car maker Faraday Future.

The Chinese mobile gaming company is investing $600 million in Los Angeles-based Faraday in a move to sell the company’s V9 luxury electric vehicle in China. The companies expect the venture to produce 300,000 cars per year starting in 2020 with each partner holding a 50% stake.

The company will try to avoid the fate of Faraday’s previous partner. Last year, real estate company Evergrande Group agreed to a $2 billion deal that fell apart after the privately held Faraday spent its initial $800 payment too quickly, according to The Verge. The9 is offering an initial payment of 5 million.

Shares of The9 plummeted nearly 12% to $2.23. 

Contact Andrew Kessel at [email protected]

Follow him on Twitter @andrew_kessel

Quick facts: The9 Limited

Price: 0.95 USD

NASDAQ:NCTY
Market: NASDAQ
Market Cap: $30.1 m
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