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Nio stock falls after short-seller Citron targets EV maker

Technology Nov 13, 2020 11:55AM ET
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© Reuters. Logo of the electric vehicle maker NIO is seen at its store in Beijin

(Reuters) - Shares of electric vehicle maker Nio (NYSE:NIO) Inc reversed course to trade lower on Friday after short-seller Citron Research recommended investors to sell the stock, citing pricing pressure posed by bigger rival Tesla (NASDAQ:TSLA) Inc in the Chinese market.

Nio's ES6 hatchback model faces imminent threat from likely price cuts for Tesla's Model Y in China, Andrew Left-owned Citron said in an investor note.

Left has long targeted companies that he thinks are over-valued. Friday's take is a reversal to the firm's original recommendation two years ago, when it urged investors to buy the stock.

"Anyone buying NIO stock now is not buying a company or its prospects, rather you are buying 3 letters that move on a screen," Citron said in the note.

Nio did not respond to a request for comment.

Tesla has cut prices in China on several occasions, aiming to gain more market share in the world's biggest car market.

Currently, China-made Model Y has an estimated price of 488,000 yuan ($73,895) in the country, according to Tesla's website.

Citron assigned a $25 price target on the Nio stock on Friday, implying a 48% downside to its last closing price.

The stock rose as much as 12.2% earlier in the session after upbeat quarterly results from peer Li Auto. Nio, which has risen more than 12-fold this year, was down nearly 1% at $47.79 in late morning trade.

"It is long buying and not short covering which is driving NIO's price move," Ihor Dusaniwsky, managing director of predictive analytics at New York-based S3 Partners, told Reuters.

Short sellers, who have bet that Nio's stock price will fall, have logged $3.5 billion in mark-to-market losses this year, according to S3 Partners.

Nio stock falls after short-seller Citron targets EV maker
 

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Comments (29)
York Regent
York Regent Nov 18, 2020 9:08AM ET
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Behind the name Citron are a bunch of scavangers
Alan Tse
Alan Tse Nov 17, 2020 1:10PM ET
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Well, Citron missed the buying time so they bring up the old news to make the stock price even lower in a fall day. Thanks Citron for giving me the chance to double my chips.
York Regent
York Regent Nov 15, 2020 10:56AM ET
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What do you expect from a short seller ******wken he’s caught on the wrong side of the trade and shockingly the market believes in that ***and reacts in a senseles manner
Joselin Sams
Joselin Sams Nov 15, 2020 9:46AM ET
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Earnings tomorrow - Im sure we will see in uptick in production count. Some ppl just like to stir the pot
Larry Cruz
Larry Cruz Nov 14, 2020 9:19PM ET
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nio better than tesla overall
Hiro Ito
Hiro Ito Nov 14, 2020 12:15PM ET
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Nio is the future China say they want ev car and who would sell nio?? I can see this stock at least 80-150usd
Kerry Morse
Kerry Morse Nov 14, 2020 6:58AM ET
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Not a lot of point - counterpoint in this piece. Article forgot to mention China’s reaction to the possibility Tesla, or any other contender, could damage the shining reputation of one of China’s golden flagships... Not a stock analyst, but I’m willing to bet China will “deal” w/ Tesla if they become too big for their retail britches... (sanctions, fees, taxes, social pressure... e.g.)
York Regent
York Regent Nov 14, 2020 5:31AM ET
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Citron is getting battered as always and came up with a price squeeze nonsense on NIO by TESLA. China is NIO’s home turf. They can produce better, faster & Cheaper. Just look at Huawei & you know it. Five out of top ten global banks are Chinese. Only one American bank found a place in that list. Remember, there’s bo economy wothout consumption and there’s no consumption wothout people. China has 1.7 billion of that.
Mick Krever
Mick Krever Nov 14, 2020 5:31AM ET
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Four of Five Biggest Banks according to Forbes: one, two, three, four... the only non Chinese bank ranked number five and guess what is it called: Hong Kong Shanghai Bank of C.
Banana Citizen
Banana Citizen Nov 14, 2020 5:12AM ET
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This short seller is Citroen. This is the samme short seller who got crushed shorting $TESLA and encourage  buying JMIA.. Look what has happened today? Retail traders who follow these people got crushed. What people don't realise these Short sellers making money sometimes not shorting stocks but buying the dip while creating hysteria among retail traders to dump the stock. So be careful listening to these people. Do your own research, then you will se NIO, LI , XPEV got monster growth ahead
Napat Limboot
Napat Limboot Nov 14, 2020 1:06AM ET
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🙏🏼🏁💮🥰
 
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