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NIO Inc. Responds to Short Seller Report

Tiger Newspress2022-06-29

NIO Inc. (NYSE: NIO; HKEX: 9866; SGX: NIO) today issued the following statement in response to allegations made in a report by Grizzly Research LLC, a short seller.

The report is without merit and contains numerous errors, unsupported speculations and misleading conclusions and interpretations regarding information relating to the Company. The Company's board of directors, including the audit committee, is reviewing the allegations and considering the appropriate course of action to protect the interests of all shareholders. The Company will make additional disclosures in due course consistent with the requirements of applicable rules and regulations of the Securities and Exchange Commission, the New York Stock Exchange, The Stock Exchange of Hong Kong Limited (the “SEHK”) and the Singapore Exchange Securities Trading Limited (the “SGX-ST”).

The Company emphasizes its continued and unwavering commitment to maintaining high standards of corporate governance and internal control, as well as transparent and timely disclosure in compliance with applicable rules and regulations.

Short-seller Grizzly Research released a negative research report on Chinese electric vehicle maker Nio (NYSE: NIO) Tuesday.

In the report, Grizzly states they believe Nio "plays valeant-esque accounting games to inflate revenue and boost net income margins to meet targets."

Despite their significant fall from all-time highs during the Covid pandemic, Nio shares are still up considerably from pre-pandemic levels, making it one of China's most valuable electric vehicle companies.

"Allow us to introduce you to Wuhan Weineng ("Weineng"), the convenient difference-maker helping NIO exceed lofty growth and profitability estimates on The Street. Despite being formed by NIO and a consortium of investors in late 2020, this unconsolidated related party has already generated billions in revenue for NIO," Grizzly said. "While this rapid growth is impressive on the surface, our investigation has found Weineng might be to NIO what Philidor was to Valeant. Just as Philidor aided Valeant in habitually making numbers, NIO has curiously exceeded estimates since establishing Weineng."

Grizzly believes sales to Weineng have inflated Nio's revenue and net income by 10% and 95%, respectively.

"Specifically, we find that at least 60% of its FY2021 earnings beat seems attributable to Weineng."

In further claims, the report states NIO gave Weineng up to an extra 21,053 batteries to boost its numbers, Weineng's top two executives double as NIO's Vice President and Battery Operating Executive Manager, and NIO's Chairman and CEO, Bin Li, is closely tied to parties central to the Luckin Coffee Fraud.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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Comment48

  • The Knight
    ·2022-06-30
    Let'S provide some pain for the short-sellers.     Nio will eventually emerge as one of the Good EVstock in a long run. I am sure this is a small pot   of gold that we will be aiming for. Cheers 
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  • Dalex1212
    ·2022-06-30
    Basis on report is absurd n thus give us a good chance to buy yesterday 😇
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  • Dalex1212
    ·2022-06-30
    Nothing wrong. It's selling battery to an associated coy which in turn does the baas n collect n charge usage n nio has 18% in that company. No basis to say nio manipulated
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  • Looyusooi
    ·2022-06-30
    Ok 
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  • Geokian
    ·2022-06-29
    hmmm. Noise or truth? 
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  • Yeahyeah
    ·2022-06-29
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  • BK99
    ·2022-06-29
    Short Seller loads of Rubbish 
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  • BK99
    ·2022-06-29
    Buy
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  • Kong123
    ·2022-06-29
    I keep hold, and add chip
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  • Kong123
    ·2022-06-29
    Dirty short seller, use all means to harm stock price
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  • 壮志高飞
    ·2022-06-29
    無風不起浪
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  • Scalper88
    ·2022-06-29
    MAYBE   this is just a correction  to cover the gap....then it will bounce of support....and perhaps reach $30 like what the      Analyst predicted 
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  • 来人
    ·2022-06-29
    Ok
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  • Guavaxf30
    ·2022-06-29
    NIO taking a big dive in HK. But can't really tell what is real as HK volume is extrememly miniscue.
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  • Jazling
    ·2022-06-29
    Wow
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  • Ping Sheng G
    ·2022-06-29
    Hope Nio can do something about it fast 
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  • BigBeef
    ·2022-06-29
    Anybody who still holds Nio shares after reading the Grizzly report is pretty brave. I'd personally start dumping now. Better to cut the loss now thenlet it go to zero with a delisting.
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  • Pepermintpat
    ·2022-06-29
    It's more like immediate quelling response. More factual disclosure would follow. They have to be above board to list in Sgx😄
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  • alfo
    ·2022-06-29
    Please like. Thanks
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  • FreePrincess
    ·2022-06-29
    Pls like. 
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