Why NIO Stock Is Trading Lower Today

And why the promote-off couldn’t final.

What took situation

Shares of Chinese electrical-vehicle maker NIO (NYSE:NIO) were Trading decrease on Tuesday morning, amid a huge-basically based promote-off of technology stocks as shoppers continued to react to news of a likely COVID-19 vaccine. 

As of 10: 45 a.m. EST, NIO’s American depositary shares were down about 10.1% from Monday’s closing model.

So what

Sooner than we dive in, you will more than likely be able to need to maintain this in mind: NIO, cherish completely different electrical-vehicle stocks, has had a torrid bustle in 2020.

By intention of Monday, the inventory used to be up nearly 1,000% on the twelve months. 

NIO Chart

NIO data by YCharts.

That bustle has been pushed in share by fundamentals — NIO is a worthy more fit company now than it used to be in January — but worthy of it has been pushed by intense investor hobby in electrical vehicles, following a spectacular bustle by category leader Tesla earlier in 2020.

More broadly, many technology-linked stocks maintain had a sturdy twelve months, as shoppers who were flush with cash, but reluctant to make investments in many ragged businesses amid the COVID-19 pandemic, sought stocks with longer-term verbalize likely that used to be no longer going to be unaffected by the crisis. 

It be worth nothing that NIO used to be a long way from essentially the most efficient electrical-vehicle inventory in retreat on Tuesday morning. Additionally as of 10: 45 a.m., Tesla used to be down 5.6% from Monday’s end, NIO’s domestic Chinese rivals Li Auto and Xpeng were down 10.9% and 6.8%, respectively, and U.S. electrical-truck open-up Lordstown Motors used to be down 9.9%.  

A blue NIO EC6, an upscale electric crossover SUV with a sporty coupe-like roofline

NIO hit several milestones in the third quarter, including the first deliveries of its contemporary EC6 sports actions crossover. Portray source: NIO.

Now what

For auto shoppers preserving NIO’s shares, the right kind news is that the company will checklist its third-quarter earnings forward of the market opens next Tuesday, Nov. 17. That is proper news since the checklist will nearly unquestionably be a real one: NIO role a sales file and hit key milestones in its verbalize knowing in the quarter, and its chief monetary officer has hinted that price-maintain watch over measures utilized earlier this twelve months are bearing fruit.

Will it is adequate to send the inventory reduction up? Tune in next Tuesday to search out out. 

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John Rosevear has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

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