NIO - NIO Inc.
1.5100 -0.01 (-0.66%)
Pre-Market: 5:57AM EDT
| Previous Close | 1.4600 |
| Open | 1.4500 |
| Bid | 0.0000 x 41800 |
| Ask | 1.5400 x 29200 |
| Day's Range | 1.4400 - 1.5500 |
| 52 Week Range | 1.1900 - 10.6400 |
| Volume | 21,500,327 |
| Avg. Volume | 26,553,364 |
| Market Cap | 1.663B |
| Beta (3Y Monthly) | N/A |
| PE Ratio (TTM) | N/A |
| EPS (TTM) | -44.1020 |
| Earnings Date | Sep 24, 2019 |
| Forward Dividend & Yield | N/A (N/A) |
| Ex-Dividend Date | N/A |
| 1y Target Est | 3.41 |
- InvestorPlace
Nio Stock Jumped After Q3 Win, But Headwinds Persist
Nio (NYSE:NIO) stock climbed more than 11% after the "Tesla (NASDAQ:TSLA) of China" reported strong third-quarter earnings on Oct. 8. Investors were especially pleased to learn that the company's vehicle delivery increased by 35% from the second quarter.Source: Carrie Fereday / Shutterstock.com InvestorPlace - Stock Market News, Stock Advice & Trading TipsThis news came at just the right time for Nio stock, since the company has been struggling for most of this year. The company's second-quarter earnings were a big disappointment, as was the news that the company laid off 20% of its workforce. * 7 Reasons to Buy Canopy Growth Stock While it's encouraging to see that Nio finished quarter three on a high note, this doesn't discount the very real headwinds the company faces. And even after the jump in the company's shares, Nio's stock price is still down 81% from a year earlier.Here are three things you should know before investing in Nio stock. Nio's Sales Have Been Hit or MissIn recent months Nio, and the Nio stock price, has struggled due to declining electric vehicle sales in China. The company's sales first started to drop in July, after the Chinese government reduced subsidies for electric vehicles in June. The U.S. experienced declining demand for electric cars as well. According to Bloomberg, the demand for electric vehicles grew 35% during the first half of 2019. Increasingly, consumers are looking for more fuel-efficient vehicles. China is at an advantage since it's the largest producer of electric cars. However, electric cars are priced higher than other vehicles. It remains to be seen whether the demand for Nio's vehicles could drop further during an economic downturn. The Company Has Real Financial ProblemsIn the coming years, it seems likely that more consumers will begin to embrace electric vehicles. The question is, will NIO still be around when that happens, or will the company have spent through its cash reserves first?The company is burning through cash at an astonishing rate. During the second quarter, the company spent $620 million in preparation for the launch of the ES6. Nio does have a deal with its largest investor, Tencent Holdings, for an investment of $200 million. But at the rate the company's spending money, $200 million probably won't go very far. NIO Is Nowhere Near ProfitabilityFinally, the company's third-quarter earnings are a step in the right direction, but Nio is still nowhere near profitability. Most analysts agree that it's better to hold the stock at this point until it's clear what will happen with the company's financials. Even analysts that were previously bullish on Nio stock are starting to become hesitant about the company's future. A Goldman Sachs analyst recently downgraded the stock, citing problems with sales and possible share dilution.The market for electric vehicles is going to be big and Nio still has potential. But the company is going to have to get ahold of its spending and sales before it's considered a good investment. As of this writing, Jamie Johnson did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Reasons to Buy Canopy Growth Stock * 7 Restaurant Stocks to Leave on Your Plate * 4 Turnaround Plays to Buy Now The post Nio Stock Jumped After Q3 Win, But Headwinds Persist appeared first on InvestorPlace.
- MarketWatch
Nio’s stock leans on ‘bullish engulfing’ stock price chart pattern to stop further weakness
Shares of Nio Inc. sank Wednesday, after a report that discussions over a potential large new funding deal had been halted, with investors now leaning on a “bullish engulfing” stock price chart pattern to halt further declines to fresh record lows.
- Bloomberg
Volvo Foots Bill for Battery Charges in Bid to Curb Emissions
(Bloomberg) -- Volvo Cars isn’t just electrifying its lineup to cut carbon emissions. Now the Swedish automaker says it will pay customers to make sure they plug in.Volvo is tying the launch of its first all-electric vehicle -- the XC40 Recharge crossover -- to a broader plan for shrinking the carbon footprint of its models by 40% through 2025. And it’s backing that pledge with a promise to pay the first year’s worth of charging costs for owners of its plug-in hybrids, starting with the 2021 model year.Volvo placed itself at the forefront of electric car hype in 2017 when it vowed to rid its lineup of cars running purely on fossil fuels by 2025. To get there, it’s going to roll out a new battery-electric model every year until 2025, starting with its XC SUVs, Chief Executive Officer Hakan Samuelsson said. Those will join a growing range of hybrid models.“We believe we should treat sustainability as as much of an integrated part of our business as safety, not just something we do as an add-on,” Samuelsson said in a phone interview. “We’re making it part of our product offering.”Model 3 RivalBuyers of 2021 model year hybrids will be able to claim a refund for their electricity costs during the first year of ownership based on power consumption data extracted from Volvo’s app for Apple and Android smartphones. Volvo plug-in hybrid owners drive in electric mode only about 40% of the time, Samuelsson said in an interview with Bloomberg Television.The XC40, which Volvo unveiled earlier today in Los Angeles, will have 200 miles of range in the U.S., 402 horsepower and take 40 minutes to get to 80% battery capacity on a fast-charging system, the company said. That compares to the 240-mile range of Tesla Inc.’s Model 3 sedan.Samuelsson said Volvo will start producing its first EV late next year and price it to compete with the Model 3, which starts at about $39,000 but has been selling on average for roughly $50,000.“It’s affordable for a much broader range of people” than higher-priced luxury brand electric cars, said Volvo’s Chief Technology Officer Henrik Green. The XC40 is “more like a $50,000 car than a $100,000 car,” he said.The electric XC40 will join a wave of new EVs debuting to keep up with tightening emissions regulations in China and Europe. While uptake remains slow, carmakers including Volkswagen AG and Daimler AG have launched new models like the Audi e-tron and Mercedes EQC to chase after Tesla.Volvo is pushing ahead with its electric ambitions as others in the space struggle. NIO Inc., China’s would-be Tesla competitor, is running short of cash. Jia Yueting, founder of electric vehicle start-up Faraday & Future Inc., filed for bankruptcy. And Dyson Ltd., the famed maker of vacuum cleaners, pulled the plug on its battery-powered car project.‘Midterm’ Profitability GoalVolvo would not be making a fully electric XC40 if it wasn’t “absolutely sure” the car will be profitable, Samuelsson said.“It might be lower profit margin initially, but what counts is more midterm” profitability goals, he said.The bet on electrics comes at a time when the carmaker is coping with a global sales slowdown and tariffs that led to a 30% drop in first-half operating income. To cut costs, the company plans to merge engine operations with Chinese parent Geely.Samuelsson said Volvo wants to increase the appeal of electrified vehicles so they sell without government subsidies -- and incentives like free charging for the first year. “Long term, if this is really going to do something to the climate or the environment, the cars need to be attractive and need to be bought by customers with their own money,” he said.(Adds CTO comment in eighth paragraph.)\--With assistance from Shery Ahn and Amanda Lang.To contact the reporters on this story: Gabrielle Coppola in New York at gcoppola@bloomberg.net;Ed Ludlow in San Francisco at eludlow2@bloomberg.netTo contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Gabrielle Coppola, Chester DawsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Zacks
China's Auto Sales Still in Free Fall: Any Recovery in Sight?
Waning consumer demand in the wake of tariff woes and economic slowdown is dragging down China's vehicle sales.
- Benzinga
Report Suggests China Has Halted Deal Talks With Nio: 'Risks Assessed Too Big'
ADR (NYSE: NIO) shares are falling Wednesday morning after a report suggested a speculated investment in a local province may not materialize. A Tuesday report in the National Business Daily suggested Nio was in talks to strike a 5-billion yuan (or $707 million) investment in the Wuxing District of Huzhou City in east China that also includes the setting up of a factory with an estimated annual capacity of 200,000 units. Although the third-quarter delivery numbers give a ray of hope that things may turn around, Nio's precarious cash position along with the macro challenges the carmaker is facing makes the shares a risky bet for investors.
- MarketWatch
Nio's stock drops after report that talks of funding for a new factory were halted
Shares of Nio Inc. dropped 5.2% in active premarket trading Wednesday, after a report that talks for a sizable investment to build a factory in China were called off. On Tuesday, the China-based electric car maker's stock rose 1.3% after the National Business Daily (NBD) reported that Nio was in talks with Wuxing District of Huzhou City on funding of over 5 billion renminbi, or about $704 million at current exchange rates, for a factory in the district with a capacity to make 200,000 vehicles a year. On Wednesday, NBD reported the talks were halted given the heavy risks, with no agreement of intent having been reached. Nio's stock has plunged 53.0% over the past three months through Tuesday, while U.S.-based rival EV maker Tesla Inc. shares have gained 2.2% and the S&P 500 has eased 0.3%.
- Benzinga
Nio Shares Trade Higher On Report of Chinese Factory Deal Talks
Nio Inc – ADR (NYSE: NIO ) shares, which are struggling despite the encouraging third-quarter delivery numbers reported last week, were seeing some positive momentum Tuesday. Nio stock tumbled 20% Sept. ...
- Barrons.com
Tesla Stock Looks Better Than You Think. Take a Look at the Competition.
(TSLA) stock has had a difficult year, but maybe the electric vehicle pioneer deserves a break. It turns out it is hard to make electric cars. Just look at three potential competitors for Tesla (ticker: TSLA). The privately held maker of high-end home appliances Dyson, start-up Faraday Future, and 2018 electric-vehicle initial public offering (NIO) (ticker: NIO) are all hitting bumps in the road.
- InvestorPlace
Nio Stock Continues to Flash Big Red Flags for Those Who Pay Attention
Nio (NYSE:NIO) is functionally insolvent. It cannot pay its bills and has likely run out of money. The reason we know this is because so far in October it has not closed any financing that was previously announced. You should sell any Nio stock you now own before the company is taken over by its creditors.Source: Sundry Photography / Shutterstock.com A Seeking Alpha article published on Oct. 9, "Nio Inc: The End is Near," clearly explains all the reasons why NIO is insolvent. The article explains that cash burn has been about $500 million a quarter and that the end of Q2 NIO had only $503 million in cash.In addition, Nio has announced two cash financings that have not ever closed. This included a $200 million convertible note that was due to close at the end of September. So far in October, there is no news on that financing.InvestorPlace - Stock Market News, Stock Advice & Trading TipsNio is not required to issue cash flow statements. So there is no actual knowledge of what the quarterly cash flows have been. The article points out that even Nio's bonds now trade at just 30 cents on the dollar. If the bonds are trading so far below par, the article points out, that implies that Nio stock is now deemed worthless by bondholders. Financial Insolvency ApparentOn Oct. 8, Nio provided a delivery update. There was no information whatsoever on the state of the company's finances. Nio did not indicate whether the $200 million convertible notes from its founder and Tencent (OTCMKTS:TCEHY) had closed or not. * 10 Tech Stocks to Buy Now for 2025 Without this information, it is impossible to see how Nio is financing itself. The article cited above points out that Nio runs its business at negative gross margins. That means the more electric vehicles it produces the more its cash flow losses grow.On June 30, 2019, over three months ago, Nio's financial statements show it had just $503 million in cash and securities. But its interest-bearing debt was $215 million in short-term debt and $948.9 million in long-term debt. In addition, there was $42.5 million in the current portion of long-term debt. This does not include other trade payables, including operating leases, taxes payable, trade payables, etc.Given that in Q2 Nio lost $478 million, and this likely occurred in Q3 as well, it is hard to see how the company has any cash left now. This company is likely, therefore, insolvent. Implications for Nio Stock ShareholdersThe U.S. is in a trade war with China. The last thing that the government or any official body will be willing to do is to bail out equity holders on the NYSE of Nio stock.For this reason, I highly suggest that you do not wait to see what will happen next. For example, even if Nio were to pull off some sort of financing at this point, it is not likely to benefit the Nio stock price.First of all, any new financing will likely be some sort of debt issuance with collateral over the majority of Nio's valuable assets. Second, there would likely be warrants or convertible features that would highly dilute, cram-down, or even eliminate the common stock of existing Nio stockholders. Third, the most likely situation is that the company will be sold. There is no guarantee that the price would be higher than the existing price. * 10 Tech Stocks to Buy Now for 2025 Moreover, as I pointed out in my previous articles on Nio stock, once the company is deemed insolvent, the directors are under no obligation to look out for the interests of Nio stock shareholders. They must take care of debt holders and creditors at that point. Bottom Line for Nio Stock HoldersYou should get out of Nio stock now if you own it. Do not look to average down. It is useless to wait for a higher price. There is likely no buyer of the whole company. If you feel like a deer in the headlights, sell NIO. Do not procrastinate. In fact, do not even try to short the stock. You might get into a situation you do not understand and you don't want to be subject to the whims of a situation that has all kinds of red flags.As of this writing, Mark Hake did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Beverage Stocks to Buy Now * 10 Groundbreaking Technologies Created by Universities * 5 Semiconductor Stocks Worth Your Time The post Nio Stock Continues to Flash Big Red Flags for Those Who Pay Attention appeared first on InvestorPlace.
- Zacks
Will Trade War and Controversies Thwart Tesla's Growth?
Tesla is dominating the electronic vehicle market for long but the trade war and frequent controversies have distracted it from its sky-high goals.
- Bloomberg
Dyson Becomes Latest Sign That Electric-Car Bubble Is Bursting
(Bloomberg) -- Dyson Ltd.’s sudden decision to scrap its $2.5 billion electric-vehicle ambitions is the latest reality check creeping into the once soaring EV industry.The famed maker of vacuum cleaners and hair dryers couldn’t find a way of making the project commercially viable, billionaire James Dyson said in a letter to staff Thursday. The announcement came about two years after the company first disclosed its plans to jump into car manufacturing.Dyson represents one of the most high-profile players to pull out of a sector that’s attracted hundreds of start-ups in recent years seeking to become the next Tesla Inc. But there are mounting signs that the bubble is bursting as China scales back handouts in the sector and competition heats up. Sanford C. Bernstein estimates that global EV sales fell for the first time ever in July and dropped by a record 23% in August.“Tesla’s future remains uncertain. Almost all the EV start-ups trying to follow look challenged,” Bernstein analysts, including Max Warburton and Robin Zhu, said in a report that cited the Dyson decision as a worrisome development in the industry. “Most of these start-ups will likely fold. The truth is barriers to entry in autos remain high. Making cars is hard. The move to EVs will be expensive.”Take the case of China’s NIO Inc., one of the most prominent electric-car makers in a country that makes about half of the world’s EVs. Last month it reported a wider-than-expected quarterly loss, leading the stock to tumble to a record low and prompting analysts to openly question the company’s viability. The shares jumped on Tuesday after NIO reported third-quarter deliveries exceeded the company’s forecast, but the stock has since erased all those gains.Elsewhere in China, Lifan Industry Group Co. and Zotye Automobile Co. have had to issue statements denying speculation that they’re planning to file for bankruptcy, though the former conceded it’s under liquidity pressure.The competition is also getting tougher. Besides Tesla, traditional automakers such as General Motors Co. and Volkswagen AG are throwing massive resources into electrification. VW has vowed a $33 billion push to bring battery-powered autos to the masses. Apple Inc. has had an automotive project since about 2016, although it is said to have scaled back its ambitions.There are growing concerns that the ample supply of cheap funding for new-age carmakers is about to dry up, according to Bernstein.As to Dyson, the company said it plans to continue its 2.5 billion-pound ($3.1 billion) investment program into new technology, and will concentrate on manufacturing solid-state batteries and other technologies including machine learning and robotics.“Singapore will play an important role in Dyson’s growth plans,” Tan Kong Hwee, assistant managing director at Singapore’s Economic Development Board, said in an emailed statement Friday. Despite Dyson’s decision, Singapore “remains interested in advanced manufacturing activities, including for EVs,” he said.Experts had questioned the company’s costly plans to build an electric car plant in Singapore, where average salaries are among the highest in the world. Ford Motor Co. closed its factory in the city-state about 40 years ago, effectively ending car production on the island.“If everybody else is building a plant in China at a fraction of the cost in terms of labor, it didn’t make a lot of sense for anybody to build that size of a manufacturing facility over there,” said Steve Man, an analyst at Bloomberg Intelligence in Hong Kong. “I hope Singapore wasn’t expecting much from this.”Still, Singapore has much riding on Dyson in its efforts to attract start-ups and advanced technology companies. Dyson became one of the biggest global industry names to ever relocate there.There’s another sector Dyson is looking to invest in Singapore. The family office of James Dyson has incorporated in the city state and is in the process of hiring IT and finance-service staff, according to job advertisements posted on Dyson’s website. The family office was established in 2013 and employs around 55 people globally.“It would have been nice to have but the reality is OK, it’s not going to work let’s look at something else,” said Song Seng Wun, an economist at CIMB Private Banking in Singapore. “It’s still about making money.”\--With assistance from Craig Trudell.To contact the reporters on this story: Kyunghee Park in Singapore at kpark3@bloomberg.net;Molly Schuetz in New York at mschuetz9@bloomberg.net;Yoolim Lee in Singapore at yoolim@bloomberg.netTo contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, ;Jillian Ward at jward56@bloomberg.net, Will DaviesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Yahoo Finance
Nasdaq CEO: Chinese IPOs are 'in our economic interest'
Adena Friedman, the CEO of Nasdaq, said it is best for the U.S. to keep the door open to Chinese companies.
- Bloomberg
James Dyson Shows It's Too Easy to Make Electric Cars
(Bloomberg Opinion) -- The reason it was even conceivable for Dyson Ltd. to make an electric car may also have been why its project was doomed to fail: They’re simply too easy to make. The British company, best known for its expensive vacuum cleaners, has now abandoned its 2 billion-pound ($2.5 billion) plan to branch out and take on the likes of Tesla Inc. and Volkswagen AG. Whereas cars with a combustion engine need about 30,000 components, an electric vehicle needs just 11,000 parts, according to research from Goldman Sachs Group Inc. That reduction in complexity has lowered the barriers to entry for the automotive market, and caused a surge in the number of new carmakers.Dozens of startups have entered the fray over the past few years, from Tesla and Lucid Motors Inc. in the U.S., to Byton Ltd. and NIO Inc. in China. Since 2011, electric vehicle startups have raised $18 billion in funding, and announced 43 models and the capacity to make 3.9 million vehicles a year, according to Bloomberg New Energy Finance. That’s a lot of competition.While Dyson’s 1.1 billion pounds of Ebitda in 2018 gave the relatively small British manufacturer some money to play with, standing out from the electric vehicle crowd would have been quite the challenge.And those earnings are a drop in the ocean compared to the wealth of the automotive giants who are waking up to the epochal shift away from dirty combustion engines. Volkswagen alone has announced plans to invest $52 billion in electrification as it targets production of at least 2 million electric vehicles a year by 2025. Its existing network of dealerships in 153 countries will make it considerably easier to sell those cars.Dyson would also have needed a faster return on its investment than the established carmakers to keep the project going. The small size and embryonic nature of this market would have made that difficult. Just 575,000 electric vehicles were sold globally in the three months through June. That’s 3.7% of the overall automotive market.The ambitions of the British company, controlled by the billionaire inventor James Dyson, won’t be the last to fall by the wayside. Others are struggling. Shares in NIO, a Shanghai-based firm backed by Tencent Holdings Ltd. and Baidu Inc., have fallen 86% from a post-IPO peak last year as its losses have deepened. Faraday Future, a Chinese-backed, U.S.-based rival, teetered on the brink of insolvency before clawing itself back from the edge.Given the brutal environment, Dyson’s retreat looks wise. Such projects often have a detrimental effect on the rest of the business, which in Dyson’s case includes hand- and hairdryers. After Apple Inc. started its own project to build a car back in 2015, it had to carefully control how many software engineers moved from its iOS team (which makes the all-important operating system for iPhones and iPads) to join the secretive project.For Dyson, the car risked becoming a similar distraction. In a letter to employees, he admitted he saw no way to make a car “commercially viable.” Better to concentrate resources on his core competencies. A failure at a later date would have been much more painful, and potentially ruinous. To contact the author of this story: Alex Webb at awebb25@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Benzinga
Has Nio Turned A Corner With Q3 Delivery Beat?
Shares of Chinese electric automaker, Nio Inc – ADR (NYSE: NIO ), which fell following weak second-quarter results reported Sept. 24, are regaining some of their momentum on the back of strong third-quarter ...
- MarketWatch
Nio shares gain after delivery numbers top outlook
Shares of Chinese electric car maker Nio Inc. are up 9% in morning trading Tuesday after the company reported third-quarter delivery numbers that came in ahead of Nio's outlook. The company said it delivered 4,799 vehicles during the period, up 35.1% from the second quarter. Nio had been forecasting 4,200 to 4,400 units for the third quarter. The company said its deliveries consisted mainly of the ES6 vehicle, a five-seater electric SUV. "September deliveries in particular were positively impacted by expedited shipments ahead of China's national day holiday," Chief Executive William Li said in a release. "In addition to the solid sequential improvement in our delivery numbers, we have seen accelerated growth of our order backlog since September supported by a more expansive sales network." Nio shares have struggled recently, falling 43% in the past month and 51% over the past three months.
- GlobeNewswire
NIO Inc. Provides Third Quarter 2019 Delivery Update
SHANGHAI, China, Oct. 08, 2019 (GLOBE NEWSWIRE) -- NIO Inc. (“NIO” or the “Company”) (NIO), a pioneer in China’s premium electric vehicle market, today provided its third quarter 2019 delivery results. Deliveries in September were 2,019 vehicles, including 1,726 ES6s and 293 ES8s.
- InvestorPlace
3 Reasons Why Nio Stock Is Stuck in Gear
Over the last several months, I've been consistently bearish on electric vehicle maker Nio (NYSE:NIO). Commonly referred to as China's Tesla (NASDAQ:TSLA), that comparison originally had a positive connotation. But with both companies' equity shares - and especially the Nio stock price - underperforming this year, it's now a regrettable assessment.Source: xiaorui / Shutterstock.com Primarily, that's because warning signs against both automakers were flashing wildly. And I'm not just referring to their less-than-favorable financials. As I researched alternative energy sources, I discovered that the science of such innovations clashed with their economics. One of the biggest impediments is rolling out the EV charging infrastructure necessary for mainstream adoption. I wrote:Simply put, the demand is there, but the platform isn't. This is a repeated scenario throughout the world, negatively impacting the Nio stock price.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAdmittedly, with more consumers driving EVs, this should incentivize the development of public charging stations and other infrastructural needs. However, another bottleneck is the charging station's lack of monetization.As Fast Company put it, no one has found a way to make EV infrastructures economically viable. Until this matter is resolved, it represents another critical delay for NIO. * 7 Important IPO Stocks to Watch for the Long Run However, I'll admit this: because of the nominal deflation of the Nio stock price, it follows the law of small numbers. In other words, any news item could potentially skyrocket shares.But as we discovered, this mathematical dynamic also works the other way. With NIO well under $2 a pop, the EV maker has proven that not all cheap stocks are discounts. And no, I still wouldn't gamble on shares. Here are three psychological reasons why: NIO Is Progression by RegressionEarlier this summer, I wrote a piece that stakeholders of Nio stock did not appreciate. Because of the unproven nature of EVs, I felt that shares could sink to zero someday.Obviously, we're not quite there yet. However, back when InvestorPlace published my story, the Nio stock price was just above $3. At time of writing, shares are trading hands at $1.64. Put differently, we're making worrying progress.At the time, I focused my attention on the science of EVs. For example, I discussed the fact that EV batteries operated best under relatively tight thermal conditions.So far, I have yet to find a scientific source that contradicts the shortcomings of EVs. Interestingly, Gavin Harper, Faraday Institution Research Fellow at the University of Birmingham and author of "Fuel Cell Projects for the Evil Genius," noted that EVs "take time to charge so you need an awful lot of infrastructure to service these vehicles."This is also a point that Voro growth strategist and alternative energy expert Nicholas DiPreta concedes. In an email regarding some of the limited advantages of hydrogen energy, DiPreta told me, "the recharge time is much faster than that of electric cars (5 minutes or so)."Now let's look at NIO psychologically. Do you think most drivers will want to sit in their car for 30 minutes at a charging station? Technology has always been about doing more stuff in less time. With EVs, you're basically doing the same thing - driving - in more time.That's just a hard sell for the average consumer. Too Many Compromises Threaten Nio StockIf I may be blunt, here's the reason why EVs have disappointed investors. As NIO and Tesla have amply demonstrated, their EVs are gorgeous. Moreover, the technologies that they embody are right out of science fiction.But consumer psychology is a rarely discussed topic when it comes to EVs. That's unfortunate because before EVs can take over the auto industry, they must overcome decades of established behaviors.For instance, EV batteries must power not only the propulsion but all the accessories of the vehicle. Naturally, you don't want to unnecessarily use your battery for heating or cooling the cabin if you don't have to.To get around this problem, Harper observed that many drivers "precondition" their EVs. Preconditioning involves using an EV's temperature control system while plugged into a power source. As Harper further explains:The EV will then get to comfort temperature before you leave. This conserves the energy from the battery as the car is heated or cooled to the right temperature and the car has 'thermal mass.' It takes less energy to maintain a temperature than using energy to get the vehicle up or down to temperature.Like millions of American drivers, I just get in my car and go. I don't give a second thought to preconditioning. But with EVs, this is a cumbersome reality. Maybe you don't have an issue with it, but what about everybody else?Again, it's a tough sell to the average consumer, which invariably hurts the Nio stock price longer term. EV Efficiency Has an AsteriskI always obey all traffic laws and never exceed the speed limit. However, my friend has a tendency of blowing through speed limits as if they were merely recommendations.As I told my friend, fast driving leads to increased inefficiency of an already inefficient internal combustion engine. However, my friend had a great counterargument: every time he punches the throttle, he can always refuel at any number of gas stations.Put differently, fossil-fueled cars are an easy trade-off: more fun means more money, and more money means less fun.However, it's not so simple with EVs. In this case, more fun could leave you stranded.Because EVs are holistically limited compared to traditional cars (in terms of range and refueling stations), drivers find creative ways to stretch their mileage. As Harper observed, "Savvy EV drivers have cottoned on to some of the finer points of aerodynamics. So called hypermilers may adopt techniques such as tailing trucks on freeways in order to travel in their slipstream."As I mentioned earlier, this is a hard sell to the consumer. While some drivers may gain intrinsic pleasure of reducing their environmental impact, I dare say that most people just want to get from point A to point B in the quickest time possible. Thus, this is just another challenge that seriously detracts from Nio stock.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Best ETFs for 2019: The Race Is a Little More Gnarly Now * 7 Next-Generation Healthcare Stocks to Buy * Are These 10 High-Yielding S&P Dividend Stocks Traps or Treasures? The post 3 Reasons Why Nio Stock Is Stuck in Gear appeared first on InvestorPlace.
- InvestorPlace
3 Contrarian Reasons to Believe in Exxon Mobil Stock
After a promising start to 2019, oil giant Exxon Mobil (NYSE:XOM) has since spent most of the year disappointing shareholders. While it's no consolation to those who have a heavy position in XOM stock, the bearishness is at least understandable. Due to multiple domestic and global headwinds, not many sectors have been left unaffected.Source: Ken Wolter / Shutterstock.com But adding to the troubles for Exxon stock is the underlying company's U.S. Securities and Exchange Commission 8-K filing. Essentially, this document has given Wall Street an important clue as to what Exxon Mobil expects for its upcoming third-quarter earnings report. Most alarmingly, management anticipates Q3 revenue to come in at $3.1 billion, down half what it hauled in for the year-ago quarter.It's already bad enough that since the April 23 session, XOM stock has dropped more than 18%. This has leveled year-to-date returns, leaving Exxon stock flat. Tacking on a disastrous Q3 seems like a guaranteed continuation of volatility.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAdmittedly, Exxon stock has been a rough play in recent years. Thus, it may not be suitable for risk-intolerant investors. But if you've got the stomach, Exxon Mobil can surprise you. Here are three reasons why. No One's Panicking on XOM StockThanks to the internet, information travels lighting quick. And when Exxon Mobil filed its 8-K disclosure, every analyst on the block poured into the numbers. * 7 Important IPO Stocks to Watch for the Long Run Of course, no one particularly liked what they saw. Furthermore, Exxon stock has taken some heavy hits as of late. October is still incredibly young, yet shares are down almost 4% since this month's opening price.Despite every reason to blast XOM stock, though, analysts have largely remained muted in their response. For instance, UBS analyst Jon Rigby and Mizuho's Paul Sankey kept their "neutral" ratings and their respective price targets.On the more bullish end of the spectrum, Bank of America analyst Doug Leggate maintained his "buy" rating. Additionally, he kept his $100 price target.Now, I'm not suggesting that anyone base their decision on XOM stock strictly on analysts' opinions. However, I think it's more than interesting that no one is really clanging the bell. And as Leggate wrote, the company's revenue downgrade is "largely a consequence of commodity changes with no material operating issues to change the go forward investment case." Exxon Stock to Benefit from Green Energy DelaysSeemingly, every time I watch the news, two distinct themes pop up: why someone hates President Donald Trump and why we need to worry about climate change.If you think I'm going to wade into these debates, think again. I already have enough people hating me and I don't necessarily need more.But it's safe to say that underlining the latter issue is the alternative energy movement. Prior to the modern era, going green was somewhat of a chore. Thanks to companies like Tesla (NASDAQ:TSLA) or Nio (NYSE:NIO), though, conserving the environment became fashionable. Theoretically, the rise of electric vehicles and other alternative fuels impose a headwind on XOM stock.However, that case isn't so clear cut. According to Gavin Harper, the University of Birmingham's energy development manager and author of "Fuel Cell Projects for the Evil Genius," the science of alternative energies often clashes with the economics.Harper said that due to the relative mechanical simplicity of EVs, they're easier to introduce at low volume. But this changes with scale."As you scale to much larger percentages of ultra low emission vehicles in the vehicle parc, suddenly the infrastructure challenges with EVs become more challenging -- vehicles take time to charge so you need an awful lot of infrastructure to service these vehicles, it also introduces a great many new loads onto the grid," Harper told me in an email interview.And what about hydrogen-powered vehicles? Harper wrote that "The infrastructure problems with hydrogen are really challenging -- you can't achieve the density of filling stations economically."While alternative energy sources are duking it out for future dominance, fossil fuels are ready now. That augurs well for Exxon stock for the foreseeable future. Political Threat to Exxon Mobil Is OverstatedInterestingly and perhaps worryingly, Real Money contributor Stephen Guilfoyle mentioned a possible political threat against XOM stock. Specifically, Guilfoyle warned that:"Presidential candidate Elizabeth Warren, who appears to be juggernaut at the moment, proposed an aggressive plan to tax heavily those corporations or trade associations that spend heavily themselves on lobbying the federal government. That tax, under her plan starts at 35% on lobbying based expenditures and scales up to 75%, as such spending also scales higher. This is not a political statement. Just an observation that such a plan would impact negatively a firm such as Exxon Mobil."Indeed, if Warren is elected, Exxon stock faces serious risks. However, investors probably shouldn't overreact here. That's because The Guardian's Jessica Valenti bravely exposed an ugly component of American politics. In her words, she bluntly stated, "We just don't trust women."In her 2016 article, Valenti quantifiably exposed a double standard in how Americans perceive politicians based on gender. I believe that Valenti has a valid case because very few individuals would claim that Trump represents a moral benchmark. Yet significantly more Americans trusted Trump over former Secretary of State Hillary Clinton.To be fair, the Clinton name arouses distrust among conservatives not based on gender, but rather on political allegiances. Nevertheless, I find it curious that the rest of the world doesn't mind female leaders. But in the U.S., we apparently have an issue with it.This is not a political statement, but rather, a political reality. Cynically, it also benefits XOM stock.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Important IPO Stocks to Watch for the Long Run * 7 High Volatility Stocks to Buy as the Market Rebounds * 7 Dow Jones Industrial Average Stocks to Sell The post 3 Contrarian Reasons to Believe in Exxon Mobil Stock appeared first on InvestorPlace.
- InvestorPlace
Don’t Confuse Nio Stock With an Actual Investment, But…
Shares of China's electric car company Nio (NYSE:NIO) have dished out plenty of pain in just the past couple of weeks, with Nio stock still down 40% since its post-earnings plunge that took shape back on Sept. 24. Worse, even with the modest relief from the recently-hit record low of $1.19, the current Nio stock price near $1.63 is still only one-fourth of its IPO price from September of last year.Source: Sundry Photography / Shutterstock.com If you're getting the itch to take a shot on NIO here after whispers that China's government is mulling a much-needed bailout, you're not crazy, and you're not alone. * Are These 10 High-Yielding S&P Dividend Stocks Traps or Treasures? Just make sure you understand what Nio stock really is here.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Nio Stock Crashes and BurnsInvestors more or less knew it would be bad. They didn't know, however, just how bad it would be. Last quarter's loss of 45 cents per share (a $479 million loss overall) was nearly triple that of the 18 cent per-share loss analysts were modeling. And though revenue of $219.7 million was well above expectations of $184.6 million, it's a far cry from the kind of top line the young company needs to be driving.Quarterly sales were lower to the tune of 7.5%; Nio should still be growing revenue in light of its production ramp-up and the fact that it only began delivering cars last year.Perhaps worse, the major loss confirmed the market's worst fears about Nio. It's quickly running out of cash.The company responded quickly and decisively to that reality, announcing at the same time it released last quarter's numbers that it would also move forward with smaller-than-planned showrooms and cull its employee base. It's also spinning off some units it says it doesn't need. It's clearly a defensive maneuver, and may just as easily undermine the company's capabilities to make enough quality cars to drive necessary revenue.Perhaps worst of all, Nio thereafter announced it was issuing $200 million worth of debt to provide near-term liquidity. It's already got more than $1 billion in long-term liabilities on its balance sheet, which is quickly becoming difficult to service.The picture is grim, to put it bluntly, for a company that's been pegged as the Tesla (NASDAQ:TSLA) of China, hence the recent meltdown. That doesn't make Nio stock un-ownable, but it does mean you have to understand 'the play.' A Temporary but Powerful CatalystIt was only a rumor of a possibility, but sometimes that's enough. Nio may be on the receiving end of some sort of bailout effort, if not from key stakeholder Tencent Holdings (OTCMKTS:TCEHY), then China's government that wants to be a high-profile player in the EV market. Sanford C. Bernstein analysts led by Robin Zhu first floated the idea this week.It's a distinct possibility, though the plausibility of that prospect isn't entirely relevant. What matters most here is that a crowd hungry for a turnaround now has an idea to latch onto.And they did, in spades. It's where and how they latched onto it that's so encouraging.Look back at the daily chart's action from Wednesday, Oct. 2nd, right after Bernstein's Zhu made the suggestion that a bailout may be impending. After an open below Tuesday's low, the Nio stock price grew to a close above Tuesday's high. This sweeping intraday change of heart is called an "outside day" reversal, and indicates a massive reversal of sentiment. Thursday's follow-through solidifies Wednesday's hint.It's a purely psychological matter, and as such, the effect won't likely last very long. In light of its 40%(+) beat-down in just few days though, even a few days' worth of bullish action could be relatively significant. Bottom Line for Nio StockNio may still have a shot at eventually being a viable electric car company. It may not happen, but it could. Only time will tell. But, it's too soon to be making such a decisions. The cold, hard fact of the matter is, nobody knows right now.And that's an important reality to bear in mind, particularly for anyone who does step into a new Nio trade here. Don't mistake a few bullish days as proof that this name will end up being as rewarding as its rival Tesla's shares eventually did. It's just a trade, likely to run into resistance at key moving average lines all around the $2.80 area.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Best ETFs for 2019: The Race Is a Little More Gnarly Now * 7 Next-Generation Healthcare Stocks to Buy * Are These 10 High-Yielding S&P Dividend Stocks Traps or Treasures? The post Don't Confuse Nio Stock With an Actual Investment, But… appeared first on InvestorPlace.
- MarketWatch
Nio's stock slips in volatile trading after Goldman cuts rating, slashes price target by 85%
Shares of Nio Inc. slipped 0.3% in morning trading Friday, after Goldman Sachs analyst Fei Fang backed away from his bullish stance on the China-based electric car maker, citing concerns over sales volumes and potential share dilution. The stock has had a volatile start Friday, as it has traded down as much as 4.9% and up as much as 3.0% intraday. Fang cut his rating to neutral, after being at buy for the past seven months, while slashing his stock price target by 85%, to $1.47 from $9.76. While Nio's sales volumes have outperformed U.S. rival Tesla Inc. and BYD Tang since China's government cut electric-vehicle (EV) subsidies in June, Nio's third-quarter guidance implies a 423-unit, month-on-month decline in volume in September, and the fourth-quarter outlook remains "clouded." And given the outlook for continued negative free cash flow, Nio's funding pattern suggests a preference for continued use of equity, which would result in significant share count dilution," Fang wrote. The stock has soared 24% since closing at a record low of $1.32 on Oct. 1,which followed a 57% plunge amid an 8-session losing streak. The stock has shed 74% year to date, while Tesla's stock has dropped 31% and the S&P 500 has gained 17%.
- GuruFocus.com
Will NIO Get a Bailout From China Inc.?
The Chinese EV startup’s bonds say bankruptcy is imminent, but the share price is still buoyed by hopes of government intervention Continue reading...
- MarketWatch
Nio's stock tumbles toward record low, has lost half its value in 7 days
Shares of Nio Inc. tumbled 11.1% toward a record low in afternoon trading Monday, despite a Treasury Department official denial a report that it was considering plans to block Chinese companies from listing in the U.S. Trading volume was 48.5 million shares, enough to make the stock the NYSE's most actively traded, and more than double the full-day average of 22.8 million shares. The stock has now shed half its value amid a 7-session losing streak, highlighted by a 20% drop last Tuesday in the wake of electric car maker's second-quarter results, in which losses widened, sales fell and the company said it cut more than 2,100 jobs by the end of the current quarter. Nio's stock shed 10.7% on Friday, after the report that a listing ban was being considered was published. While shares of other U.S.-listed Chinese companies rose on Monday after the denial of those plans, Nio's stock kept sinking. Nio's stock has now plummeted 76% year to date, while shares of U.S.-based rival Tesla Inc. has lost 27% and the S&P 500 has gained 19%.
- Bloomberg
China’s Tesla Rival Just Had a Nightmare Week. It May Get Worse
(Bloomberg) -- NIO Inc. investors looking for a reprieve after the stock’s worst week ever are waking up to more bad news: Sanford C. Bernstein just slashed its estimate for the Chinese electric-vehicle maker to almost 50% below the current price.Bernstein analysts led by Robin Zhu cut their price target to 90 cents from $1.70 -- the first to go below $1, according to data compiled by Bloomberg. The EV maker has lost more than 70% of its market capitalization, or about $5 billion, since its New York initial public offering a year ago. The shares fell as much as 13% to a low of $1.53 on Monday, adding to a 42% slide last week.Now valued at just $1.6 billion, NIO embodies the challenges faced by China’s electric-car aspirants. The country’s highest-profile EV startup and the first to go public, NIO is “symbolically important,” Bernstein said. A failure would represent “an embarrassing setback for China’s EV ambitions,” damaging other local contenders’ fund-raising plans, the analysts said.NIO last week posted a worse-than-expected second-quarter loss because of sputtering demand, rising costs and intensifying competition. Even with fresh money set to be raised from Chief Executive Officer William Li and shareholder Tencent Holdings Ltd., NIO may only have enough cash to stay afloat for weeks, according to Bernstein.To fuel sales, NIO announced a plan to open 200 pop-up stores in more than 100 Chinese cities. Bernstein analysts are “skeptical” about the campaign’s chances of success, as the effort is costly and may fail to generate EV demand outside the 15-20 biggest cities.NIO’s main options now are insolvency or a bailout by the Chinese government or another suitor, according to Bernstein. Still, a deal with the government could be difficult, as an investment in a bleeding company in such a capital-intensive industry might be viewed as a “misappropriation of state funds,” Zhu said by phone.(Adds Monday’s trading in second and third paragraphs.)\--With assistance from Catherine Larkin.To contact Bloomberg News staff for this story: Chunying Zhang in Shanghai at czhang714@bloomberg.netTo contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Ville Heiskanen, Angus WhitleyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- GuruFocus.com
NIO Is Running on Empty
Wall Street analysts find little good to say about the Chinese EV company after a 2nd-quarter earnings flop Continue reading...
