After giving up an incredible amount of value yesterday, Nio Inc – ADR (NYSE: NIO) is tumbling in the market yet again today. The bloodshed comes after the company announced its financial results for the fourth quarter and full year.
While the revenue results topped analyst expectations, there were some serious concerns with regard to slowing vehicle deliveries. These concerns continue to push the stock for the bottom today. Below, we’ll talk about:
- The issues that are sending NIO stock tumbling;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Why NIO Stock Is Tumbling
As mentioned above, Nio isn’t having a very good day in the market today. In fact, the stock has been in the red since the open and only seems to be falling further.
The declines come on the heels of an earnings report that, from a financial perspective was great. However, from a perspective of continued growth, the report proved to be upsetting.
While the company beat expectations with regard to revenue, vehicle earnings missed the mark and deliveries showed some serious slowing in the first two months of 2019. In fact, in January, vehicle deliveries came in at 1,805. In February, they fell by more than 50% to just 811.
As a result of the slowing vehicle deliveries from NIO, there was a bit of salt to add to the wound. The company announced that it will not be building its new factory in Shanghai. Unfortunately, the slowing vehicle deliveries is the area where the company needs to focus most and will be setting aside the goal of expanding production to this new facility.
This is an overwhelmingly tough break for NIO shareholders. Ultimately, investors hoped that with Chinese subsdidies for the purchase of electric vehicles, we would see increasing deliveries. However, since that’s not the case, some are scratching their heads, wondering what the company is doing wrong.
What We’re Seeing From The Stock
The news is important to investors as it has the ability to move the market. Unfortunately for Nio and its investors, the news released by the company yesterday proved to be overwhelmingly negative.
With slowing vehicle deliveries, investors are expecting to see revenue go on the decline and the company fall further and further away from making it to profitability. So, it’s not shocking that upset investors continue to send the stock tumbling.
As is just about always the case, our partners at Trade Ideas were the first to alert us to the declines. Currently (11:19), NIO is trading at $7.16 per share after a loss of $0.86 per share or 10.67% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on NIO. In particular, we’re interested in following the story surrounding the company’s work to expand vehicle deliveries. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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