Why Nio Stock Popped Friday

The regulatory battle gripping U.S.-listed Chinese language stocks took one other flip right this moment.

Howard Smith

Key Parts

  • Nio has situation a date for releasing its 2d-quarter financial outcomes.

What took declare

Many varied U.S.-listed Chinese language expertise stocks bear been hit in most up to date days by fright and uncertainty connected to a crackdown by the Chinese language govt. The battle took one other flip right this moment, but there is reason to mediate Chinese language electric vehicle (EV) maker Nio (NYSE:NIO) could well maybe well profit. As of 3: 20 p.m., Nio shares bear been up 4% on the day, after having jumped greater than 6% earlier. 

So what 

The self-discipline escalated significantly Friday morning when the Securities and Trade Commission highlighted extra dangers with Chinese language stocks, and imposed more challenging disclosure requirements for these companies within the hunt for to list on stock exchanges. So if the self-discipline is getting a long way more traumatic, why would that be superb for Nio? There are plenty of chances, together with the functionality for the Chinese language govt to focus its attention on competitor Tesla‘s (NASDAQ:TSLA) operation in Shanghai. 

Nio ET7 luxury electric sedan in front of city skyline.

Nio ET7 luxury electric sedan. List source: Nio.

Now what

U.S. investors are conscious that the Chinese language govt shall be unpredictable, and can reputedly act for purely political reasons unrelated to the businesses themselves. If Chinese language and U.S. regulators hump tit-for-tat and issues continue to escalate, Tesla could well maybe well turn out to be a high-profile intention thru no fault of its hold. 

And the U.S. has factual taken a step to amp up the battle. SEC Chairman Gary Gensler issued a statement asserting, “I if fact be told bear requested staff to search out certain disclosures from offshore issuers connected with China-essentially based mostly working companies sooner than their registration statements shall be declared efficient.”

Investors also can furthermore think that the U.S. motion could well maybe well restrict further listings of Chinese language EV makers. With China being basically the most fascinating automotive market on the earth, investors could well maybe well feel that proudly owning Nio and the rather plenty of different EV companies already listed also can thus be more treasured. 

Nio has been growing sales rapid, and the firm announced right this moment that it could well maybe well maybe maybe file its 2d-quarter financial update on Aug. 11. Investors shall be watching to see if the industry continues to pass closer to profitability. 

This article represents the opinion of the author, who also can disagree with the “unswerving” suggestion declare of a Motley Fool top rate advisory provider. We’re motley! Questioning an investing thesis — even no doubt one of our hold — helps us all mediate severely about investing and invent choices that wait on us turn out to be smarter, happier, and richer.

Howard Smith owns shares of NIO Inc. The Motley Fool owns shares of and recommends NIO Inc. and Tesla. The Motley Fool has a disclosure policy.”>

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