Nio Inc (NIO)

[DrHarleyboy]

There’s a Very Good Chance Nio Stock Will End up Worthless

Nio’s quarterly results announced in June were astonishingly bad. The company’s vehicle deliveries plummeted in half, from nearly 8,000 the previous quarter to just 3,989 in Q1. That’s barely 1,000 cars a month that they were selling. Yet the market still values this tiny little operation at a nearly $4 billion market cap.

It gets worse. For the quarter, Nio brought in revenues of $249 million. Its operating margin on each vehicle sold was -7%. That’s right, even before counting salaries and other overhead costs, Nio was losing money on every car it sold. Add in those prolific other charges and things get incredible. Despite revenues of just $243 million, Nio managed to lose $390 million.

For all the grief Tesla gets from short-sellers, this is infinitely worse. The company is losing money on every car it sells, and its overall losses are far larger than its overall revenues. To add insult to injury, the company had to recall 4,803 of its vehicles in June due to battery issues.

Electric vehicle batteries are expensive to replace, and at 4,803 vehicles, that’s more than three months worth of production for this firm that is implicated in this vehicle defect. With only $600 million or so in cash left as of last quarter, $400 million in quarterly losses, and a massive recall on top of that, Nio is in dire straights.

https://investorplace.com/2019/08/nio-stock-will-end-up-worthless/