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Nio stock gets boost from new SUV, fracking pioneer to buy out Continental, FedEx raises dividend

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Yahoo Finance Live looks at several of today's trending stocks tied to leading industry stories, including billionaire Harold Hamm's offer to take his company Continental Resources private.

Video Transcript

RACHELLE AKUFFO: Welcome back, everyone. It is time for our triple play. And my pick is Chinese EV maker, Nio. Now, it's often considered the Tesla of China. Now after sliding Monday, the stock popped today. As you can see, it's up more than just about 17% there on the day. Now, investors bought the dip ahead of the unveiling of Nio's newest product launch, which is its ES7 SUV.

Now, unlike other EVs, NIO uses a swappable battery that could be switched out for a fully charged one in a few minutes, rather than relying on sort of having time with a plug-in charger. Now, two years ago, there were doubts that the Shanghai-based company could even stay in business. Its cash balance wasn't enough to provide working capital and liquidity to continue operations.

And then, of course, came the pandemic. They also had a cut in EV subsidies from Chinese regulators, as well as more scrutiny for them and other tech giants as well, which also then delayed the launch of this ES7 SUV. The stock is down 42% year to date, but they are banking on these deliveries of these ES7s. They're expected in August. And that could signal wider adoption for the brand.

SEANA SMITH: Yeah, Rachelle, the new SUV, we're going to see it tomorrow. But NIO, it's on track for the biggest pop that we've seen since mid-March, obviously something that investors welcome, something that they are excited about. But the big issue with NIO-- and we've discussed this many times before-- is production and deliveries. And when you take a look at that number, in May alone, they only delivered 7,000 vehicles.

Yes, that's a step in the right direction. But when we talk about the market size of China and the potential for the company there, they are going to need to scale that production and do that quickly. I think that's the big issue facing the company. You mentioned the COVID lockdowns. You mentioned the fact that there have been the chip shortages have been affecting the company.

The company has come out warning about it as late as March, saying that these are issues that they're still expecting to deal with for the remainder of this year. So stock down pretty significantly year to date. Lots of hype. We'll see whether it's a, buy the rumor, sell the news, type of event tomorrow. But we will see.

All right, moving on here, a takeover offer sending shares of Continental Resources surging today. Now the shale company announcing an all-cash buyout proposal from the family trust of founder Harold Hamm. Now he's the billionaire fracking pioneer who helped launch the US shale boom.

Now, Hamm is offering about $4.3 billion in cash to buy the portion of the company that his family doesn't currently own. His offer of 70 bucks a share-- that's according to "The Wall Street Journal"-- represents a premium of about 9%, Dave, from the closing price yesterday. Now, Continental hasn't yet reviewed the offer, but if it is approved, it would value the company at just around $25 billion.

DAVE BRIGGS: Early word is they are going to have to come up on that and might be undervaluing a little bit. But broadening out in the industry as a whole, some oil and gas news out of Washington, DC. Oregon Senator Ron Wyden proposing an additional 21% tax on oil companies' profits over what they deem excessive, which is a billion dollars. And that's not all-- an additional 25% tax on buybacks. Now, will they get full buy-in from all Democrats because no Republicans will support that? Not likely. We'll talk about it a bit more later on with Rick Newman. But certainly, a popular opinion right now in this country.

My play is, well, some very good news in these bad couple of days because FedEx sure is popping on news that they are raising their quarterly dividend by 53%. The dividend will be paid on July 11th to any investors who own the stock as of end of trading on June 27. The company, though, also added three new directors in an agreement with activist investor, DE Shaw.

Not all-- FedEx announcing it will now tie executive compensation directly to shareholder performance. Their new CEO, Raj Subramaniam, replaced longtime CEO Fred Smith, who had been so successful and really iconic in the industry, effective June 1st. Prior to today, that stock had really been sluggish as of late. But wow, look at the performance today, popping up 14%. That marks their best one-day performance in three decades, Rachelle.

RACHELLE AKUFFO: I mean, it shows investors are perhaps happy, then, that they're seeing FedEx listening to the concerns of some of these activist investors. It shows that openness to address their concerns. And obviously, it has been lagging behind its bigger rival, UPS, which saw an increase in profit margins to 13.2% this year, last year, while FedEx hasn't seen annual margins above 7% since 2017.

And of course, you have other retailers getting into this space. You have Amazon using its own logistics, other retailers doing this direct-to-consumer shipping using USPS. So a lot of stiff competition there that FedEx is going to have to compete with.

SEANA SMITH: Certainly a stiff competition. It almost feels like every day there's a new entrant into that space. But for today, FedEx investors are very excited about that news, with the stock up just around 14%.