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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

NIO Stock Fell More Than 12 Percent After Being Accused by Grizzly Research

After a short-seller claimed NIO was inflating sales and profit margins in a study released Tuesday, the Chinese electric-car maker’s stock fell more than 12 percent in Hong Kong on Wednesday.

NIO (NYSE: NIO) is accused by Grizzly Research of “accounting shenanigans to exaggerate sales and enhance net income margins to achieve objectives” in a study released on Tuesday.

Wuhan Weineng Battery Assets Company was the subject of the study. Contemporary Amperex Technology Co. 300750–2.11 percent (300750–China), NIO, and other electric vehicle battery makers formed the firm in 2020. Battery as a service, or BaaS, is the name given to the service that NIO provides to its customers, in which they pay a monthly charge to use the company’s batteries.

NIO was the first to separate the purchase of a vehicle and the purchase of a battery. To save money, NIO buyers may purchase an EV at a lesser price and then pay for the battery monthly. An electric vehicle may be made more affordable by using this method instead of purchasing and filling up a gasoline-powered automobile.

Battery sales to Weineng are recorded as revenue by NIO. That’s the problem Grizzly has with the firm, to be honest. In NIO’s financial statements, the business structure is clearly stated. When asked about its report, Grizzly did not react.

Barron didn’t get a response from NIO. National Instruments (NIO) issued a statement saying the study “is without merit and includes many inaccuracies, unsubstantiated rumors, and misleading conclusions and interpretations about facts relevant to NIO.”

The study was made public Tuesday afternoon, which is odd. Tuesday trade saw a 2.6 percent drop in NIO shares. Motoring companies have had a rough day. Shares of Tesla TSLA –5.00% (TSLA) fell by 5%.

An additional day has elapsed after the report was published. In Hong Kong on Wednesday, NIO shares dropped by 11.4% to 164.10 Hong Kong dollars ($20.19). A 7.6 percent dip in NIO depositary receipts was seen in the US premarket.

S&P 500 SPX –2.01 percent and DJIA –1.56 percent futures were both down 0.02 percent and 0.01 percent.

Further disclosures will be made by NIO when it has completed its investigation into the claims and determined the best way to safeguard the interests of shareholders.

The post NIO Stock Fell More Than 12 Percent After Being Accused by Grizzly Research appeared first on Best Stocks.

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