Nio Inc sank lower as China imposes COVID-19 restrictions once again

  • NYSE:NIO fell by 8.98% during Monday’s trading session.
  • China begins another round of lockdowns due to rising COVID cases.
  • Nio is also forming a special committee to look into its recent short seller claims.

NYSE:NIO tumbled out of the weekend as Nio investors received the news they had been dreading from the Chinese government. On Monday, shares of Nio plummeted by 8.98% and closed the trading day at $20.57. It was a bearish and tentative start to the week as investors weighed the upcoming June CPI report and the start of the second quarter earnings season. The Dow Jones dropped by 164 basis points, the S&P 500 fell by 1.15%, and the NASDAQ tumbled lower by 2.26% during the session.

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Nio investors woke up to some negative headlines out of China as the country is once again imposing its Zero-COVID strategy. The first lockdowns are starting in the casino-hub, Macao. While nothing has been announced for Shanghai or the Anhui Province where Nio has a production facility, investors are preparing for the worst. Shares of other Chinese EV makers like XPeng (NYSE:XPEV) and Li Auto (NASDAQ:LI) were also trading lower, as well as EV leader Tesla (NASDAQ:TSLA) which has a significant portion of its business based out of China.

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Another reason for Nio’s stock fall to open the week? Nio announced that it is creating an independent committee to investigate the recent Grizzly Research short report claims. Much of the claims revolved around Nio’s battery swap subscription numbers that grossly inflated Nio’s revenues and net. This news was not received well by investors as many saw it as an admission by the company that the claims could be true. It will be interesting to see what information the committee is able to come up with, and if Nio will make the findings public.

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