|

Nio Inc Stock News and Forecast: NIO plunges on SEC crackdown on US-listed Chinese companies

  • NIO stock tumbles on Thursday as SEC may delist it.
  • The Chinese EV automaker shares plunged over 15% on Thursday after rising on Wednesday.
  • Nio Inc is still high-risk early stage and this adds more uncertainty.

Update: NIO stock plunged 15.17% on Thursday, hitting the lowest in two months at $14.87 before settling above the $15 mark. The slump in the Chinese Electric Vehicle (EV) maker came after the US U.S. Securities and Exchange Commission (SEC) widened its regulatory crackdown on US-listed Chinese companies for not disclosing audit reports. Additionally, the BOE warning on an incoming recession spooked markets and triggered a massive sell-off on global indices, not sparing Wall Street, with the tech-heavy Nasdaq Composite Index losing about 5% on the day. All eyes turn towards the US Nonfarm Payrolls data for fresh trading opportunities as an eventful week draws to a close.

NIO stock keeps struggling after the Wall Street open, as the Chinese electric vehicle builder is feared to be delisted on the US stock market by the US Securities and Exchange Commission. NIO shares are down almost 10% at the time of this update (less than one hour into the open), having met resistance after Wednesday's Fed-induced relief rally by hitting and being unable to rally past the 20-day Simple Moving Average. Nio Inc. has been on a long-term downtrend since hitting an all-time high in January 2021, and the political issues at the top level between the US and China have only aggravated it. Back below $17, the immediate support for the stock is at the year-to-date low of $13.

NIO stock daily price chart

NIO stock daily price chart

NIO stock is once again under pressure as the SEC has added it to its delisting list. "Delisting list" is a bit of a tongue twister and it is certainly putting investors in a stick-or-twist situation just when hopes for a possible detente between Chinese and US securities regulators had been growing. This latest development just adds further confusion to the Chinese ADR sector and is likely to lead to another rush to the exits from US investors.

Read more EV stocks research

This malaise has been ongoing ever since the pulled Ant Group IPO, then came the DIDI debacle, and now the potential for multiple delistings of Chinese stocks.

NIO stock news: Nio fighting to avoid US delisting

NIO has pledged to keep working with both Chinese and US regulators as the company said it will aim to keep its dual listings in New York and Hong Kong. The Chinese electric vehicle constructor statement reads like this:

"NIO is aware that the Company has been provisionally identified by the SEC under the HFCAA on May 4, 2022 U.S. Eastern Time. The Company understands such identification may result from its filing of the annual report on Form 20-F for the fiscal year ended December 31, 2021... NIO has been actively exploring possible solutions to protect the interest of its stakeholders. On March 10, 2022, the Company completed a secondary listing of its Class A ordinary shares on the Main Board of the Hong Kong Stock Exchange (the “HKEX”) under the stock code “9866.” The Class A ordinary shares listed on the HKEX are fully fungible with the ADSs listed on the NYSE"...NIO will continue to comply with applicable laws and regulations in both China and the United States, and strive to maintain its listing status on both the NYSE and the HKEX in compliance with applicable listing rules.

This is not exactly reassuring in our view. Nio Inc. says it has been exploring solutions such as listing in Hong Kong. Fine, but that solution does not help US investors. While NIO says it will strive to maintain its listing on the NYSE it outlines no plans on how to achieve this. A tacit admission perhaps that it has no control over the situation in reality. This is at a higher level and is a political decision between the US and China. Again nothing to comfort US investors. 

NIO stock forecast: Wait-and-see until US-China standoff settles

Nothing to do here but exit and stick to the sidelines in our view. If the situation gets resolved then NIO stock should recover and investors will have ample opportunity and likely cheaper prices to reenter and buy NIO shares, but this may drag on. With the global political situation in turmoil and China attempting to walk a fine line between Russia and the US, this decision will take time. 

The updated SEC list included some other retail favorites like Pinduoduo (PDD), JD.com (JD), XPeng (XPEV), and others, amounting to 88 in total. Expect losses on Thursday for those names.

NIO stock chart, daily

* The author is long Alibaba.

Previous updates

Update: NIO stock plummeted a whopping 15.06% on Thursday, to finish the day at $15.40 per share. Wall Street collapsed after soaring in the Fed's aftermath, as the Bank of England put stagflation fears back on the table. The central bank warned the UK may fall into recession before year-end, sending investors into panic-selling mode. The Dow Jones Industrial Average ended the day down 1,060 points, while the S&P 500 shed 4.34%. The Nasdaq Composite was the worst performer, down roughly 5%.  Stocks plunged without rhyme or reason, as US government bond yields soared to fresh four-year highs. The dismal market mood is likely to persist through the Asian session and ahead of the release of the US Nonfarm Payroll report on Friday. 

Author

Ivan Brian

Ivan Brian

FXStreet

Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.

More from Ivan Brian
Share:

Editor's Picks

AUD/USD keeps the red near 0.6950 after weak Aussie jobs data

AUD/USD holds losses near 0.6950 on disappointing Australian jobs data, extending the previous day's retracement slide from the monthly high and hitting a fresh weekly low during Thursday’s Asian session. Meanwhile, declining US bond yields drag the US Dollar away from the April 2025 high, touched after Wednesday's hot US CPI, helping limit losses for the currency pair.

USD/JPY slides back below 158.00 as USD reverses post-CPI gains

USD/JPY extends the previous day's pullback from a three-week high, attracting follow-through selling and sliding below 158.00 during Thursday's Asian session. Traders remain on high alert amid speculation that authorities will step in to prop up the Japanese Yen. The US Dollar, meanwhile, reverses Wednesday's hot CPI-led gains to April 2025 highs as US bond yields retreat on China bond-buying talk, further pressuring the pair.

Gold rebounds to $4,150 as China bond-buying reports smash US yields

Gold attracts strong buying and retests $4,150 during the Asian session on Thursday, snapping a three-day losing streak to a one-week low. Retreating US bond yields drag the US Dollar away from the April 2025 high, touched in reaction to Wednesday’s hot US CPI report, and boost the non-yielding bullion. Reports that China is quietly buying US Treasuries through Canada are smashing US Treasury bond yields and the USD.

Bitcoin falls on hot CPI: Why $80,000 support matters

Bitcoin's (BTC) most critical level to watch is near $80,000 as September's hot inflation reading pressures the crypto market, according to Glassnode. The top crypto declined within minutes of the September Consumer Price Index (CPI) release, which showed a 3.7% annual increase in headline inflation, above forecasts of 3.6%. Core inflation, which excludes food and energy prices, came in at 2.6%.

China seems routing US Treasury holdings through Canada

According to a Bloomberg report, China seems to be moving United States securities to non-US custodian banks in other countries, masking its role in financing US deficits.

Has Bitcoin really escaped the macro forces it was built to fight?
Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?