Nio bag holding and the Bears
To be a Nio investor (Bag holder), you need to :
1. Have a strong heart to bear all the fluctuations.
2. Have time and patience
3. Have all the energy to counter all the negativity around the stock and the bears thesis. ( believe me, the bears can make every good news sound bad)
4. Have spare funds to DCA.
My 2.5 yrs of Nio investor journey brings me here today, 40% of portfolio is in it. Avg price as of today $10.08 . Overall down 20% (options trade inclusive).
I do not intend to give up on Nio as I see it as a long term hold, however I will try to trim down and balance my portfolio as it is too heavy on it.
What I see in this convertible bonds issued is an overreactive movement of traders selling down the stock. Traders loves Nio stock, they jump on every negative news on Nio and massively sell down, so much so like it is co-ordinated. The bears are out in full force once an Opportunity comes.
why Does Nio sell bonds now? I choose to think this is the best timing, pay down debt from previous bond due 2026, lock in price for current bond at $11.12 rather than do this when stock price is higher come end of year.
While no one is 100% sure where Nio will be in 2 yrs, I see the delivery recovery as a boost for the coming quarter. things should get better as they ramp up selling work, lithium price dropping.
My worry is the amount of money they burn for RnD. In my opinion, they must pace their spendings. although charging piles and swap stations are infrastructure investment for the long term, balancing funds are important for survival as well. If you do not know, nio has the most number of charging Points in china. It is a constant cash cow, 80% users of it charging point are from other brands.
So they question lies, should you buy Nio stock?
If you have the stomach for it, I think it is a good addition to a portfolio. Just don't go too deep into it. But being a Nio investor, the more you research, the deeper you will get sinker in.
So beware and good luck!
May all the short sellers of stock go bankrupt . Haha kidding. May all the short sellers turn into a saint .
Modify on 2023-09-21 03:19
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I think the notes buyer shorted yesterday to lower the conversion price to $11 since 30% premium is based on yesterday's closing price.
Now $1b investors really want the stock to be well above $11, otherwise 4.65% interest is not as good as the money in the bank, plus money in the bank has no risk.
NIO is well over $3 BILLION in revenues for Q3. Better wake up there is a pile of money to be made here
What happened? Dropped so much?