- NYSE:NIO fell by 6.02% during Wednesday’s trading session.
- Nio investors aren’t too thrilled with the smartphone rumors.
- Chinese ADRs continue to sink as further tech regulation could be on the way.
Update: NIO snapped a losing streak in a remarkable recovery on Wall Street on Thursday, despite the concerns over the Ukraine crisis. The stock added 3.71% on the day and was at $21.22 by the close. The price rallied from a low of $18.47 to a high of $21.31. Stocks charged higher on Wall Street as investors look through the Ukraine crisis, not anticipating a wider impact on the global economy.
The MSCI global index was ending well above its session low and the US dollar paring gains while oil futures pulled back from multi-year records after Russia’s invasion of Ukraine. A noticeable improvement in risk appetite kicked on later in the day when US President Joe Biden announced new sanctions on Russia which were perceived less problematic for the global economy than what markets were positioning for.
As a consequence, the Dow Jones Industrial Average ended up 92.07 points, or 0.28%, at 33,223.83 while the S&P 500 put on 63.2 points, or 1.50%, to 4,288.7. The Nasdaq Composite added 436.10 points, or 3.34%, to close at 13,473.59. However, MSCI’s gauge of stocks across the globe still closed down 0.46% after earlier falling more than 3% to touch its lowest level since March 2021.
End of update
NYSE:NIO has hit six straight negative sessions after Wednesday’s losses, as the stock is on the verge of losing the $20 price level. Shares of Nio tumbled by a further 6.02% and closed the trading day at $20.46. The stock is now in danger of falling back to its 52-week low price of $19.31, after trading as high as $55.13 earlier in 2021. The decline of Nio has been two-fold over the past year, as it has been crushed by both the growth sector correction and weakness in Chinese ADR stocks after the Chinese government has strengthened its vice-like grip over the tech industry back home in China.
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It seems that the recent rumors of Nio getting into the smartphone market is not sitting well with shareholders. Even though the company is about to unveil the ES7 five-passenger SUV in April, as well as launching both the ET5 and ET7 sedans later this year, investors have been turned off by the recent news. It should be noted that domestic rival Geely did enter the smartphone business last year to mixed results. Still, it seems as though shareholders would rather have Nio management focus on the electric vehicle industry rather than getting sidetracked by smartphones.
NIO stock price
Chinese President Xi Jinping has called upon Chinese regulators to continue with the ongoing crackdown on tech companies in the country. Much of this news is from a recently released speech by Xi that was given back in December. Still, analysts believe that we still have not seen the last of the ongoing regulations, and that the key message from Xi was that as Chinese tech companies continue to expand internationally, domestic authority will remain as strong as ever.
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