NIO Stock Price Holds Around $7.00 With Investors Positive Following Liquidity Injection


NIO Inc. (NIO) just announced that the investors completed the cash injection obligations for the first two installments of their investments in NIO China.

NIO (Anhui) Holding Co., Ltd., received from the investors RMB4.8 billion out of the RMB5 billion of cash investments for the first two installments. The remaining RMB200 million of the first installment would be paid prior to September 30, 2020 by the applicable investor according to the agreed payment schedule.

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“The strategic investments in NIO China will provide sufficient funds to support NIO’s continuous efforts to lead the technology and product development of the premium smart electric vehicles, and to offer the best user experience and services,” said William Bin Li, founder, chairman and chief executive officer of NIO. “In the near term, we will focus on improving our production capacity and expanding our network coverage to further accelerate our growth. In the long term, we remain committed to building the best user enterprise for NIO to share a joyful life and to grow together with our users.”

Also, earlier this month, Goldman Sachs upgraded the NIO stock to a buy rating only to reverse itself on June 24 and downgrade NIO to neutral.

All thanks to news liquidity risks “that were challenging Nio’s financial sustainability in 2019 have started abating,” said Goldman Sachs, as quoted by MarketWatch. 

In addition, “likely has narrowed its cash burn thanks mostly to ‘the accumulation of demand strength,’ the Goldman analysts said. Moreover, the company’s year-to-date delivery volume, up 37% on-year between January and April, ‘has highlighted Chinese consumers’ growing recognition of this emerging auto brand.’”

Since bottoming out at $2.15 in March 2020, shares of NIO exploded to a high of $6.90. If it can maintain its record monthly deliveries, and put financial concerns to rest, the stock could potentially retest a prior high of $10.25 set in March 2019.

Ian Cooper’s Personal Position in NIO: None