- NYSE: NIO fell by 2.57% during Tuesday’s trading session.
- Grizzly Research alleges Nio is inflating its sales and revenue figures.
- Nio responds to Grizzly’s allegations during the Asian trading session.
NYSE: NIO reversed course and erased its early morning gains following a new short report released by Grizzly Research. On Tuesday, shares of Nio dropped by 2.57% and closed the trading session at $22.36. All three major indices closed lower for the second straight day as last week’s market gains look more and more like a bear market rally. The Dow Jones lost 491 basis points, while the S&P 500 and the NASDAQ sank lower by 2.01% and 2.98% respectively during the session.
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During the morning session, Grizzly Research hit Nio with a short report that alleges that the Chinese EV maker is inflating its sales and revenues figures. The report looks specifically at the company’s BaaS or Battery as a Service segment, alleging that Nio sold more batteries and oversupplied the company Weineng, which played a major role in the actual swapping of the batteries. Grizzly Research alleges that Nio has inflated its revenues by at least 10% and its net income by a staggering 95%. It also hints at ties between both company’s executives, which could have an impact on the price of Nio’s stock in the future.
NIO stock price
During the Asian trading session on Wednesday, Nio responded to the report and denied all of the allegations. The company said that it would take unspecified action against Grizzly Research, and that it will disclose numbers and figures in due time. While the stock didn’t fall too hard on Tuesday, it is just another reminder of the looming storm cloud that hovers over Chinese-based ADR stocks. Nio isn’t even the first Chinese EV maker to be accused of altering its numbers, after Kandi Technologies (NASDAQ: KNDI) was in November of 2020 by Hindenburg Research.
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