Nio Inc – ADR (NYSE: NIO) is having a relatively strong day in the market today, following up on the gains that we saw yesterday. Ultimately, the gains seem to be the result of two big stories.
First Elon Musk, the CEO of the competing company Tesla (TSLA) is looking at SEC charges while Trump delayed his tariff deadline for China. As you could imagine, the news is exciting investors, sending the stock up. Today, we’ll talk about:
- The catalysts that are driving NIO stock higher;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
The Catalysts Driving NIO Stock Up
As mentioned above, there are two catalysts that are currently driving Nio’s stock toward the top. They include:
Trump Tariff Extension
We all know about the trade war between the United States and China. As part of this trade war, Trump vowed that his administration would make tariffs higher if a deal wasn’t reached by March 1, 2019. Of course, higher tarrifs are bad for any Chinese company, including NIO.
Nonetheless, it doesnt look like tariffs are going to be increased, at least, not right now. The Trump Administration announced yesterday that it would be postponing this deadline as a result of progress made between the two nations.
Elon Musk Faces SEC Charges
I’m sure that this is nothing new to you. Since September, Elon Musk, CEO at TSLA, and the SEC have been in the midst of a figurative war.
It all started when Musk tweeted that funding had been secured for a TSLA acquisition last year. Of course, we later found out that this was not the case. At the time, the SEC said that Musk had committed securities fraud.
Now the battle between the two is heating up, and it seems to be helping NIO. On February 19, 2019, Musk published another troubling tweet.
In the tweet, he said that in 2019, the company would produce about 500,000 cars. He later recanted that statement, saying that the actual figure is closer to 400,000 cars.
In a court filing made on Monday, the SEC said that Musk,
…Once again published inaccurate and material information about Tesla to his over 24 million Twitter followers, including members of the press, and made this inaccurate information available to anyone with internet access.
This proved to be a paingful filing for TSLA. However, with NIO being the company’s closest competitor, it offered the company with a decent boost in the market that seems to be continuing in the pre-market this morning.
What We’re Seeing From the Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of Nio, the recent news has been positive.
The fact that trade war tensions are starting to dwindle will likely help to bolster the Chinese economy. That’s great for the company. This combined with the blues that its largest competitor is facing is leading to continued excitement.
As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:22), NIO is trading at $9.21 per share after a gain of $0.21 per share or 2.33% 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 Tesla issues and the trade war between the United States and China.
Moreover, we’re watching production closely as NIO seems to be doing very well in that respect. Nonetheless, we’ll keep a close eye on the news and bring it to you as it breaks!
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