News 
Market Data 
Discover
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Nio: A Mixed Grade On The Short Report
By: Vince Martin | July 13, 2022
• An activist short report on Nio seems to miss the mark
• Perhaps the most aggressive accusation appears to have been disproven
• But Nio is responding as if there is some truth to the story; investors should keep that in mind
Late last month, activist short seller Grizzly Research took aim at Chinese electric vehicle manufacturer Nio (NYSE:NIO). Some investors no doubt shrugged off the report without even reading it.
NIO Weekly Chart.
Source: Investing.com
Some of those investors might simply dislike short sellers. The rise of meme stocks, like AMC Entertainment (NYSE:AMC) and GameStop (NYSE:GME), has engendered deep disdain for those traders making bearish bets. Some might see a conflict of interest for Grizzly, which disclosed a short position in NIO stock ahead of the release of its report.
Neither is a reason to dismiss the report out of hand, however. Short selling, and activist short selling in particular, provide important checks on market exuberance. Those checks offer value to the rest of the market — but can't be incentivized without creating some value for the short seller.
Indeed, no one should know this better than investors in a Chinese electric vehicle stock. Well-known firm Muddy Waters Research made its name correctly identifying fraud in that country. That same firm in early 2020 passed along an anonymous report that correctly spotted financial regularities at Luckin Coffee (OTC:LKNCY).
Activist sellers have targeted the EV space as well. Perhaps the most impactful of those campaigns was the report from Hindenburg Research on Nikola (NASDAQ:NKLA). Hindenburg's research led not only to a plunging NKLA stock price but federal charges against its founder.
To be clear, that history doesn't mean Grizzly's own report is correct. Indeed, the firm appears to have made at least one significant mistake. But Nio itself seems to be taking the allegations seriously. Investors should as well.
The Grizzly Research Allegations
Grizzly's report on NIO can be described as having three core pillars.
The first is an argument that Nio is using a third party to inflate its revenue. Nio has developed a so-called “BaaS” (battery-as-a-service) program that allows vehicle purchasers to subscribe to a battery swap program in lieu of purchasing a battery upfront. The BaaS program, however, is run by a separate company, Wuhan Weineng Battery Asset Co., of which Nio owns 19.8%.
That setup allows Nio to book the revenues from the battery subscriptions it sells upfront, instead of over a period of years. To be clear, this is not illegal, as even Grizzly notes. In fact, this revenue treatment is required under accounting rules. But the effect is to inflate Nio's current revenue — and, more importantly, its profits.
Grizzly alleges that Nio has gone even further, however. It highlights a document from Wuhan Weineng, noting that as of Sept. 30, 2021, the company was servicing 19,000 subscribers. Yet, Wuhan Weineng at the same point had purchased more than 40,000 batteries from Nio.
Grizzly sees no need for these extra sales — and no signs of those batteries actually being stored anywhere. And so the firm concludes that Nio is allegedly overshipping batteries that it simply keeps at its service centers, further boosting revenue and earnings.
Finally, Grizzly raises some concerns about governance. It points to the installation of Nio executives at the head of Wuhan Weineng as disproving Nio's claims that it doesn't control that company. Grizzly notes the ties of Nio chairman Bin Li to individuals and entities involved in the Luckin fraud. And the firm claims that Li pledged shares ostensibly owned by Nio users to back loans, and that Li may well have routed 50 million RMB (roughly $7.4 million) to his personal account through Nio.
Is Grizzly Right?
Nio's initial response was to claim that “the report was without merit.” For the most part, the market seems to have agreed. NIO stock did drop about 3% on the day the report was released — but the entire market was down, with the less-volatile S&P 500 index declining 2%.
And, indeed, there appears to be a key error on perhaps the most inflammatory claim. The 19,000 subscriber figure was derived by a prospectus from Wuhan Weineng for an asset-backed financing. But as a number of users on Twitter pointed out, that prospectus doesn't cover all of the BaaS users — only a subset. Grizzly's claim here appears to fall completely flat.
As far as the argument that revenue and earnings are being inflated, there is some truth to it. But it's worth noting that accounting treatments typically depress the reported profits of SaaS companies. Costs are booked upfront; revenue is recognized over time. For this reason, in SaaS (software-as-a-service) businesses, investors often focus more on cash flow (where upfront payments are booked 100%) and/or pay close attention to deferred revenue balances.
The existence of Wuhan Weineng does perhaps suggests that Nio's results are better than they would be otherwise — but it does not imply that those results are distorted. Indeed, in the hypothetical scenario where Wuhan Weineng didn't exist, investors to some extent would treat Nio's BaaS revenue the same way they do SaaS, and make their own adjustments in valuing the business.
Reason For Concern?
Overall, the case made by Grizzly doesn't quite land. But that doesn't mean investors can or should simply dismiss the report out of hand.
There are governance concerns here. The pledging of Nio shares, if true, at best would be a significant violation of trust.
Grizzly notes that Chinese government entities — who rescued Nio when the company was at legitimate risk of bankruptcy in late 2019 — continue to redeem shares at a rapid clip. Nio still has obligations on that front that could total as much as $6.7 billion — and only $8.2 billion in cash on hand ahead of a planned global expansion. The firm is correct in noting that further redemptions could cause Nio to need to raise additional capital — which likely would require equity issuance and thus shareholder dilution.
The risks aren't as explosive as Grizzly's broader tone would suggest. But this still is a company with a market capitalization just shy of $35 billion — and no profitability in immediate sight. (Wall Street consensus projects a modest loss in 2023.) It's also a company that this week said it would form an independent committee of directors to probe the allegations made by Grizzly.
Perhaps that response is intended to mollify the market, and remove any semblance of doubt raised by the short report. But it's worth noting that Nio said its committee would be advised by “a well-regarded forensic accounting firm.”
That kind of firm isn't necessarily one required to respond to an error-riddled report with no basis in fact. It suggests that Nio's board at least wonders if there might be something to at least some of the allegations made here. Given the history of the space, and the still-stretched valuation, that's a risk investors, at the least, need to be aware of.
Read Full Story »»»
DiscoverGold
Nio (NIO) Another retest of the trendline breakout today
By: TrendSpider | July 12, 2022
• $NIO Another retest of the trendline breakout today which is confluent with this ascending channel off the lows?
Read Full Story »»»
DiscoverGold
Nio Stock Falls After Short Seller Report Allegations
By: Schaeffer's Investment Research | July 11, 2022
• Grizzly Research accused Nio of exaggerating its revenue and profit margins
• Nio formed an independent committee to investigate the claims
Nio Inc (NYSE:NIO) is down 3.6% in premarket trading, last seen at $21.78, following some serious allegations revealed in a short sell report. Specifically, short-selling firm Grizzly Research accused the electric vehicle (EV) maker of exaggerating its revenue and profit margins, though Nio said that the allegations were without merit and is forming an independent committee to investigate the claims.
NIO is staring up at multiple long-term moving averages on the charts, most notably the 160-day trendline that kept a mid-June pop in check. The $21 region appears to have formed a level of support in recent weeks, however, while Nio stock sports a 28.7% year-to-date deficit.
Options traders are more bearish than usual toward the EV staple. This is per NIO's 50-day put/call volume ratio of 0.77 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 98% of readings in its 12-month range. In other words, while calls still outnumber puts on an overall basis, long puts are getting picked up at a quicker-than-usual clip.
Analysts, meanwhile, are firmly bullish. In fact, eight of the nine carry a "strong buy" rating, while the one calls NIO a tepid "hold." Plus, the 12-month consensus price target of $36.35 is a hefty 60.8% premium to Friday's close.
Read Full Story »»»
DiscoverGold
$NIO Still in limbo. Needs to clear 24 for a push to the 200D
By: Options Mike | July 9, 2022
• $NIO Still in limbo. Needs to clear 24 for a push to the 200D.
Needs to hold 20.5 ish.
Read Full Story »»»
DiscoverGold
Bulls Should Approach Nio (NIO) Stock With Caution
By: Schaeffer's Investment Research | July 7, 2022
• There's a lot of spread activity going on around NIO
• Will Nio stock be able to hold its 120-day moving average?
The S&P 500 Index (SPX) wrapped up the first half of the year with its worst performance since 1970, as recession fears clamber to the forefront of investor minds. One sector seems to be avoiding becoming collateral to the broader-market volatility, however. Friday morning kicked off July, as well as a slew of delivery reports from China-based electric vehicle (EV) names. For the month of June, Li Auto (LI) handed out 13,024 vehicles, Xpeng (XPEV) delivered 15,295, and Nio (NIO) saw a 60% year-over-year increase of 12,961 deliveries.
It’s more than just strong delivery numbers, though. Following the stock’s January 2021 record peak at $66.99, NIO proceeded to carve out a channel of lower lows over the next year-and-a-half, culminating in a May 12 two-year low of $11.67. Things began looking up on June 21, after the equity gapped 9.1% higher on the heels of a bull note out of BofA Global Research. Despite several days of correction, the shares of Nio stock remain above newfound support at the 120-day moving average and $21 level.
This newfound support also comes as call traders begin to circle back in on NIO. Specifically, the security just appeared on Schaeffer's Senior Quantitative Analyst Rocky White's list of names that have attracted the highest weekly options volume in the past two weeks. Per this data, 1,897,758 calls and 1,502,859 puts were traded within this two-week time period. The June 20 call was the most popular contract during this time frame, followed closely by the June 20 put in that same monthly series – indicating possible spread activity was occurring in the last month or so.
The aforementioned call popularity could be a red flag for contrarians, however. Should this optimism begin to unwind, it could weigh heavy on NIO shares. What’s more, the security is looking ripe for downgrades. Eight of the nine covering brokerage firms sport a "strong buy" recommendation.
Overall, the EV sector, like most growth plays in the last year, has been battered. That doesn't necessarily mean the time is now to jump in, as short and long term risk remains elevated and legislation dependent. It’s best to move forward with heightened caution amid the recession fears and recent inflation buzz, though buying and selling through specific methods, such as the previously mentioned spread tactic, could be wise.
The ultimate goal for a long call or put spread is still for the underlying security to rise/fall, but without the trader being "all-in" bullish or bearish. Instead, she sacrifices the unlimited profit available to the long call/put buyer in exchange for a lower cost of entry and reduced breakeven point. Also be sure to check out Schaeffer’s latest product release: Vertical Options Trader, which covers trading via call and put debit spreads.
Read Full Story »»»
DiscoverGold
$NIO Bearish MACD cross but the falling wedge setup remains intact for now
By: TrendSpider | July 6, 2022
• $NIO Bearish MACD cross but the falling wedge setup remains intact for now.
Read Full Story »»»
DiscoverGold
NIO Keep an eye on this falling wedge with price squeezing!
By: TrendSpider | July 5, 2022
• $NIO Keep an eye on this falling wedge with price squeezing!.
Read Full Story »»»
DiscoverGold
NIO Back into limbo. Holding the 21D is good, 24 needs to be cleared now til then range bounce
By: Options Mike | July 4, 2022
• $NIO Back into limbo. Holding the 21D is good, 24 needs to be cleared now til then range bounce.
Read Full Story »»»
DiscoverGold
Tesla Rivals Challenge Its Lead as Nio Sets Encouraging Record
By: TheStreet | July 3, 2022
• Tesla's rivals are not even coming close to producing and delivering EVs at the same rate as the Austin, Texas-based market leader.
Electric vehicle makers have been struggling over the last two years to produce and deliver cars, trucks and SUVs despite obstacles such as supply chain disruptions, semiconductor shortages and factory shutdowns caused by the covid pandemic.
The industry's leading EV manufacturer Tesla (TSLA) on July 2 said that plant closures at its Shanghai gigafactory in April and May and supply chain disruptions led to a smaller number of deliveries than expected in its second quarter ending June 30 with 254,695, which was 26.7% higher than the same period in 2021, but 17.7% lower than its record of 310,048 delivered in the first quarter of 2021. Analysts were originally expecting about 295,000 deliveries.
Tesla's production declined to 258,580 vehicles in the second quarter compared to 305,407 in the first quarter. It had produced 305,840 vehicles in the fourth quarter of 2021.
Tesla's rivals are not even coming close to producing and delivering EVs at the same rate as the Austin, Texas-based market leader. But they keep trying.
Tesla Rivals Struggle to Produce and Deliver Volume of EVs
Tesla rival Nio (NIO) on July 1 said that it had delivered 12,961 vehicles in June for a 60.3% year-over-year increase and its highest number of monthly deliveries ever. The company also reported 25,059 EVs delivered in the three months ending June 2022, increasing by 14.4% year-over-year. Nio has delivered a cumulative 217,897 EVs as of June 30.
NIO on June 15 rolled out its ES7, a new mid-large five-seat smart electric SUV, which is the first SUV product based on NIO's latest technology platform Technology 2.0. NIO also launched the 2022 ES8, ES6 and EC6 equipped with the upgraded digital cockpit domain controller and sensing suite, enhancing the computing and perception capabilities as well as digital experience of the vehicles. The company expects to start deliveries of the ES7 and the ES8, ES6 and EC6 in August.
Chinese EV maker XPeng (XPEV) on July 1 said it delivered 15,295 vehicles in June, a 133% increase year-over-year; 34,422 in the second quarter ending June 30 for a 98% increase year-over-year and 68,983 in the first six months of the year for a 124% increase year-over year.
The Guangzhou, China-based company said in August it will begin accepting orders for its new G9 SUV with an official launch in September.
Beijing-based Li Auto (LI) on July 1 said it delivered 13,024 EVs in June, a 68.9% increase year-over-year and 28,687 in the second quarter ending June 30 for a 63.2% increase year-over-year. The company on June 21 began taking orders for its Li L9 SUV and recorded 30,000 orders as of June 24, according to a statement. Test drives will begin July 16 with deliveries beginning by the end of August.
GM Follows Behind Tesla and Other Rivals
General Motors (GM) had 7,300 EV sales in the second quarter, according to a July 1 statement. The Detroit automaker's sales included deliveries of the BrightDrop Zevo 600 delivery van, GMC Hummer EV pickup, and the resumption of the Chevrolet Bolt EV and Bolt EUV production.
GM said the Cadillac Lyriq production is accelerating, with initial deliveries in process. Orders for the 2023 model year sold out within hours and preorders for the 2024 model opened on June 22.
The company said it will gradually increase production of the Cadillac Lyriq and GMC Hummer EV Pickup in the second half of 2022.
Read Full Story »»»
DiscoverGold
Nio (NIO) Price Target Increased to $28.00 by Analysts at HSBC
By: MarketBeat | June 30, 2022
• NIO (NYSE:NIO - Get Rating) had its price objective upped by HSBC from $26.00 to $28.00 in a research report issued to clients and investors on Thursday, The Fly reports. HSBC's target price suggests a potential upside of 28.09% from the company's previous close...
Read Full Story »»»
DiscoverGold
Nio Shares Pare Back Gains as June Deliveries Lag Behind Rivals
By: Scott Kanowsky | July 1, 2022
Investing.com -- U.S.-listed shares in Nio Inc Class A ADR (NYSE:NIO) moved slightly lower on Friday, paring back early gains, after the Chinese electric car maker reported lower deliveries than its closest peers in June despite solid growth during the month.
Monthly deliveries jumped by 12,961 vehicles, up 60.3%, as the company got a boost from demand for its electric SUVs and a recovery in China's massive auto market. The uptick marks Nio's best month of deliveries since its shares first started publicly trading in 2018.
However, Nio's results were outpaced by close rivals Xpeng Inc (NYSE:XPEV) and Li Auto Inc (NASDAQ:LI). XPeng delivered 15,295 vehicles in June - an increase of 133%. Meanwhile, Li Auto reported a 69% bump up in monthly customer deliveries to 13,024.
Demand has recently begun to pick back up for all three of these EV start-ups, with June's delivery figures following stronger sales in the previous month. The downturn earlier in the year stemmed from strict lockdowns in China that constrained supply chains and disrupted output.
Nio, which has its headquarters in Shanghai and factories in Hefei, was particularly impacted by Covid restrictions. June marks the first month since December 2021 with deliveries over 10,000.
None of the companies provided detailed forecasts about future performance.
But there are signs of recovery in the broader Chinese car market. Retail auto sales for June 20 to June 26 jumped by 28% compared to the previous period in May, according to data released earlier this week from the China Passenger Car Association.
Read Full Story »»»
DiscoverGold
NIO Round bottom base on the weekly just below a low volume area
By: TrendSpider | June 30, 2022
• $NIO Round bottom base on the weekly just below a low volume area.
Read Full Story »»»
DiscoverGold
Mizuho Cuts NIO (NYSE:NIO) Price Target to $48.00
By: MarketBeat | June 27, 2022
• NIO (NYSE:NIO - Get Rating) had its price target reduced by analysts at Mizuho from $55.00 to $48.00 in a research report issued on Monday, The Fly reports. Mizuho's target price indicates a potential upside of 99.34% from the stock's previous close...
Read Full Story »»»
DiscoverGold
Sad for those people. It should not affect the price, It was a bad accident.
Chinese electric carmaker Nio says that two people were killed when one of its vehicles fell from the third floor of its headquarters in Shanghai.
One member of staff and a person from a partner company died in the crash.
The incident took place on Wednesday at about 17:20 local time, the firm said. The people who died were inside the vehicle as it fell from the building.
Nio says it immediately started an investigation into the incident in co-operation with government officials.
The third storey area from where the car fell has been variously described as a showroom, a testing facility or a car park.
"Our company has collaborated with public security department to launch the investigation and analysis of the cause of the accident. Based on the analysis of the situation at the scene, we can initially confirm that this was an accident (not caused by the vehicle)," the company said in a statement.
NIO The hot streak continues as price is now approaching the April highs
By: TrendSpider | June 21, 2022
• $NIO The hot streak continues as price is now approaching the April highs.
Read Full Story »»»
DiscoverGold
NIO Bullish trend broke out of resistance & held above the 50 & 100 daily EMAs
By: TrendSpider | June 19, 2022
• $NIO Bullish trend broke out of resistance & held above the 50 & 100 daily EMAs RSI however shows some bearish divergence forming.
Read Full Story »»»
DiscoverGold
NIO Strong move through the downtrend line today as #GoNoGo remains firmly bullish
By: TrendSpider | June 17, 2022
• $NIO Strong move through the downtrend line today as #GoNoGo remains firmly bullish.
Read Full Story »»»
DiscoverGold
NIO Power is a mobile internet-based power solution with extensive networks for battery charging and battery swap facilities. Enhanced by Power Cloud, it offers a power service
the system with chargeable, swappable, and upgradable batteries to provide users with power services catering to all scenarios.
NIO News
 NIO's Game-changer: Unveiling the 1,000 KM Range Electric Vehicle Battery | New Era in EV Technology! | |
 NIO featured on CNN |
Company Contact Information:
NIO. Inc. (China) P:862169083306
No. 56 Antuo Road Investor
Jiading Shanghai 201804 Relations
Website: www.nio.com
Twitter twitter.com/NIOGlobal
Instagram www.instagram.com/nioglobal
Facebook www.facebook.com/NIOGlobal
News www.nio.com/news
AI
