Nio stock falls after short-seller Citron targets EV maker

Nio's ES6 hatchback model faces imminent threat from likely price cuts for Tesla's Model Y in China, Andrew Left-owned Citron said in an investor note.
By : Reuters
| Updated on: 15 Nov 2020, 11:13 AM
File photo of a new NIO ES8 (Photo courtesy: Twitter/@NIOGlobal)
File photo of a new NIO ES8 (Photo courtesy: Twitter/@NIOGlobal)
File photo of a new NIO ES8 (Photo courtesy: Twitter/@NIOGlobal)
File photo of a new NIO ES8 (Photo courtesy: Twitter/@NIOGlobal)

Shares of electric vehicle maker Nio Inc reversed course to trade lower on Friday after short-seller Citron Research recommended investors to sell the stock, citing pricing pressure posed by bigger rival Tesla Inc in the Chinese market.

Nio's ES6 hatchback model faces imminent threat from likely price cuts for Tesla's Model Y in China, Andrew Left-owned Citron said in an investor note.

Left has long targeted companies that he thinks are over-valued. Friday's take is a reversal to the firm's original recommendation two years ago, when it urged investors to buy the stock.

Similar Cars

Find More Cars
Hyundai Kona Electric (HT Auto photo)
Hyundai Kona Electric
cc | Electric | Automatic
₹23.79 - 23.98 Lakhs**Ex-showroom price
Tata Tigor Ev (HT Auto photo)
Tata Tigor Ev
Electric | Automatic
₹11.99 - 13.14 Lakhs**Ex-showroom price
Tata Altroz Ev (HT Auto photo)
UPCOMING
Tata Altroz Ev
 
₹12 - 15 Lakhs* *Expected Price
Tata Nexon Ev (HT Auto photo)
Tata Nexon Ev
Electric | Automatic
₹13.99 - 16.85 Lakhs**Ex-showroom price
Mahindra Xuv400 Ev (HT Auto photo)
UPCOMING
Mahindra Xuv400 Ev
 
₹14 - 16 Lakhs* *Expected Price
Tata Nexon Ev Prime (HT Auto photo)
Tata  Nexon Ev Prime
30.2 kWh | Electric | Automatic | 312 Km
₹14.99 - 17.5 Lakhs**Ex-showroom price

(Also read | China's EV maker Nio gains 20% in three trading days post sales surge in October)

"Anyone buying NIO stock now is not buying a company or its prospects, rather you are buying 3 letters that move on a screen," Citron said in the note.

FOLLOW US:Stay Updated with latest content - Subscribe us on
FOLLOW US:Stay Updated with latest content - Subscribe us on

Nio did not respond to a request for comment.

Tesla has cut prices in China on several occasions, aiming to gain more market share in the world's biggest car market.

Currently, China-made Model Y has an estimated price of 488,000 yuan ($73,895) in the country, according to Tesla's website.

Citron assigned a $25 price target on the Nio stock on Friday, implying a 48% downside to its last closing price.

(Also read | New energy vehicles to make up 20% of China's new car sales by 2025)

The stock rose as much as 12.2% earlier in the session after upbeat quarterly results from peer Li Auto. Nio, which has risen more than 12-fold this year, was down nearly 1% at $47.79 in late morning trade.

"It is long buying and not short covering which is driving NIO's price move," Ihor Dusaniwsky, managing director of predictive analytics at New York-based S3 Partners, told Reuters.

Short sellers, who have bet that Nio's stock price will fall, have logged $3.5 billion in mark-to-market losses this year, according to S3 Partners.

First Published Date: 15 Nov 2020, 11:13 AM IST
Recommended For You
View All
NEXT ARTICLE BEGINS

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city
By clicking "View Offers" you Agree to our Terms and Privacy Policy

Dear Name

Please verify your mobile number.

+91 | Choose city