Why NIO Stock Is Down Wednesday

Motley Fool2021-07-15
Investors are still skittish after last week's actions against DiDi Global.

What happened

Shares of Chinese electric-vehicle maker NIO(NYSE:NIO) were trading lower on Wednesday. Although investors' concerns about U.S.-listed Chinese stocks have lingered since the Chinese government took action againstDiDi Global(NYSE:DIDI)and other recently listed stocks last week, there was no immediately obvious trigger for Wednesday's decline.

As of 2 p.m. EDT, NIO's New York-traded shares were down about 4.6% from Tuesday's closing price.

So what

China's government said last week that it has launchedcybersecurity reviewson DiDi and other app-centered Chinese companies that have listed on U.S. stock exchanges this year, includingKanzhun andFull Truck Alliance. Regulators appear to be concerned that the audits and oversight required of U.S.-listed companies could somehow compromise the security of Chinese consumers' personal information.

But it's not clear that those concerns should (or will) extend to NIO. While the company does provide an app for its customers, it's mostly a carmaker -- and its shares have beenlisted on the New York Stock Exchange since 2018.

Is that why NIO's shares are down Wednesday? It seems likely: NIO itself had no news (positive, negative, or otherwise) to share on Wednesday, and only minor news (a new director was appointed) earlier in the week.

Now what

If there is a concern raised by the DiDi situation, it's that future Chinese government actions could limit NIO's ability to raise cash from U.S. investors. That wouldn't be ideal, but the company has other avenues to raise cash, including a (likely) future listing on Hong Kong's exchange.

In the meantime, NIO has plenty of cash on hand, a strong order book, and two new models coming next year. For now at least, I don't think the action against DiDi is enough of a reason forauto investorsto sell NIO.

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精彩评论

  • liangwee888
    2021-07-16
    liangwee888
    comments
  • 7725b846
    2021-07-15
    7725b846
    V shape pls...
  • spj
    2021-07-15
    spj
    Am thankful to all those who sold on Wednesday. I was looking to add more Nio and yesterday was a golden opportunity 
  • Ysheng
    2021-07-15
    Ysheng
    Buy more at discount! 
  • Customizer
    2021-07-15
    Customizer
    Down to support line. It’s time to whack it up! $NIO Inc.(NIO)$[Cool] 
  • Bob87
    2021-07-15
    Bob87
    I'm wondering why too [疑问] 
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