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NIO: Any Price Is Too High A Price To Pay

Dec. 02, 2021 11:15 AM ETNIO Inc. (NIO)BABA, DIDIY, JD85 Comments
On the Pulse profile picture
On the Pulse


  • When it comes to detecting NIO's ADR risks, investors are terribly uneducated.
  • NIO's ADR could be severely impacted if the CCP begins to urge Chinese companies to drop their abroad stock listings.
  • In 3Q21, NIO's electric-vehicle deliveries increased, but the risk is not worth the potential benefit.

NIO logo and the Nio"s user center, NIO House

Andy Feng/iStock Editorial via Getty Images

Investors in NIO Inc. (NYSE:NIO), a high-flying electric car business, face a major risk of ADR delisting NIO. According to reports, the Chinese Communist Party is pressuring Chinese enterprises to leave foreign exchanges and discourages them from

This article was written by

On the Pulse profile picture
A financial researcher and avid investor with a keen eye for innovation and disruption, as well as growth buy-outs and value stocks. Keeping an eye on the pace of high tech and early growth companies, I write about current events and the biggest news surrounding the industry, and strive to provide readers with ample research and investment opportunities.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (85)

Nio is not being delisted----see current link just posted:

so dumb
On The Pulse, entering a short position soon? 72 hours almost up you douche
Convoluted profile picture
The last time I attended a CPA review course (about 25 years ago), one of the speakers delivered a presentation on ‘international accounting/auditing standards.’ Apparently, all these years later, China is not on board.

As best I understand, they have a security concern not shared by other nations. It seems beyond any rational argument that the quid pro quo for access to capital markets is basic financial reporting.

It also seems that the benefit of transparent financial reporting would drive the price of Chinese equities much higher. Further, future capital raises would be welcome. It would seem a much better future to ditch the VIE shenanigans and truly engage with the rest of the planet.

And everyone lived happily forever.
CJH Research profile picture
@Convoluted "China has taken steps in a bid to end the impasse. A top official at the China Securities Regulatory Commission said last month the regulator is "working very hard" to resolve the audit oversight issues with US counterparts." -Bloomberg

Neither side wants wholesale delisting. That's banking revenue on 2T of funds that will move to HK or Europe. Didi violated data security law even before listing. Market is overreacting to a non-news.

Also, Evergrande announced they are going to default on the next payment. The more informed security firms expect China to start rescuing the property market after the bubble has deflated enough. Evergrande default may be just enough to end the crisis.
Interesting to see that all three China company stocks, NIO, XPEV, and LI, dropped after reporting November car sales on Thursday.
Jion profile picture
There is no delisting risk. And if it is, then it means than China favors any delisting attempt. In that case, they will help JOBS to finalize its go private procedure, as the company has signed a definitive agreement to be sold 45% higher than todays price. But, as I said, JOBS will be delisted, but no one will force other Chinese companies to follow, except the U.S. media which devaluate them constantly. Forget for a moment the so well known stocks like NIO or BABA and check smaller ones, like QH. They trade at ridiculous low prices.If they continue to have such valuation, then their insiders will offer a good premium like they did in JOBS, and they will leave U.S. markets.
GeneGrossman.com profile picture
If On the Pulse is really a financial researcher and avid investor with a keen eye for innovation and disruption as well as growth like Seeking Alpha says if is, then how come it doesn't own any stock in any Chinese company, because there are a lot of big ones there whose biggest customers are in this country, and closing down their stocks to U.S. investors would hurt China quite a bit too... so it looks to me like On the Pulse is a little disappointed in not getting positions in some of those Chinese companies, and offering us some sour grapes.
Funny to see how most Americans are obsessed by communism, and still stucked in a cold war mentality...
It used to be against Russia, Cuba now it's China.....
May I recommend you behave like a good Patriot and stop buying ANYTHING made in China.
Go around your kitchen, living room and throw out everything made by this horrible country
Start with throwing away your Iphone.....
@jmdc33 this made me laugh--a lot :-D Yes, it's so true--most products in everyday use in the US are made in China or at least have some components made in China.

Anybody else reading this from an iPhone?
@jmdc33 "Ya wanna say i'm chinese son then here's a remindah, check your tims (timberlands) they probably say made in China" Jin the Mc
02 Dec. 2021
For how long are we playing the same tune of fud and scare tactics about delistings and try to short stocks?
Reading is never enough profile picture
@Gusler so true.
But sadly many believe this crap.
zorbs99 profile picture
Take home from this article is any high school child can write an article. And this person wrote a previous article that says he dumped his life savings in LCID with zero sale. Cant make this stuff up..This is the quality of writers left.... just like our media reporters...zero quality left
@zorbs99 my thought exactly. I might have to consider canceling my premium membership if this is what SeekingAlpha promotes. And you are right, he literally wrote he invested half of his fund into LCID on Nov 13th. I can almost forgive him if he invested that much when it was still CCIV, but on Nov 13th, when the valuation is is already bigger than NIO LOL
limitlist profile picture
@Tangster775 It actually makes me want to keep my premium. I like the fact they allow it because it just exposes the truth more. Comments are brutally honest.
@limitlist lol thats one way to look at it. But when I first joined this a few weeks ago, all comments had to be approved, not sure if its just this article or that rule has been abolished.
There's more than the ADR delisting risk. If(when) China invades Taiwan, there will be a mass exodus from ALL Chinese stocks. People haven't realized that China is not their friend, and doesn't play by the same rules that guide a civil society. We are at the beginning stage of a turmoil that will perpetuate itself indefinitely.
@ThePaleTzu omg another freaking moron. Name one country that China actually and formally invaded throughout history! The only country continues to occupy and invade other countries is the US. There are thousands of Taiwanese working and living in China, no one would start a war; only The US and their crony lackey kept spreading fear through the media while they can't even fix their own problems.
@ThePaleTzu Anybody believe the China Taiwan invasion devasting bs is the one lack of independant brain. If China wanna take Taiwan , it wont speak it out everyday everywhere, Any high level military action will be confidential. Plus, China's East and South East coast city group might be over half of the whole mainland Gdp and population, So if China want a war, he must calculate how much loss he can scarifice.
Soldalma profile picture
@Tangster775 Vietnam and India are two countries that China invaded. I am old enough to remember reading about the war between China and Vietnam in the news. The invasion of India is very recent. Try to learn a bit of history before babbling nonsense.
Hey, he COULD be right. Maybe everything he said MIGHT happen. This article is so generic, you could replace the name Nio with any other and it would read the same. It's like a bad YouTube commercial.
M2B+ Financial & Strategic Advisory profile picture
There are many companies not listed running at OTC, NIO, BABA, and Others. The real value of those companies never should be denied... The Fearfull realised by the most investors become greedy to buy MORE!!
02 Dec. 2021
In this market environment it seems companies get penalized for doing well.
NIO has reached the point were it is more similar to BYD and less like Rivian. One is a great company, the other is a speculative play. One has a lagging stock, the other rockets up on just air.
I'm okay with this. But NIO seems like winner long term.
02 Dec. 2021
Funny thing is NIO has given me 1000% return. More than what it is possible with any other of the EV stocks (except tesla). And I still agree it is undervalued at this point.
NIO is the way to go now. More revenues, more R&D, more cash on hand, better partnerships, and bigger expansion plans than their Chinese peers. And with the coming of the ET7, ET5, and other mass market vehicles, well... the blue sky is within reach.
U know of nothing man, it's laughable
Speculative article based on no data and facts and mere conjecture has no direct relevance to NIO. Very disappointing.
This is not an objective opinion.
This is an opinion piece written without any facts. It lacks a deep understanding of international politics, intergovernmental relations in China, and the macroeconomic policies in China.
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