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Why NIO Stock Is Trading Lower Today

By John Rosevear - Updated Jan 15, 2021 at 10:56AM

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One of NIO's co-founders has taken a new job elsewhere.

What happened 

Shares of Chinese electric-vehicle maker NIO (NIO 1.68%) were trading lower on Friday, after one of the company's co-founders was named CEO of Foxconn's new electric-vehicle business. 

As of 10:30 a.m. EST, NIO's American depositary shares were trading down about 5.2% from Thursday's closing price.

So what

Taiwan-based Hon Hai Precision Industry (HNHPF 0.29%), better known as Apple manufacturing partner Foxconn Technologies, made news earlier this week when it announced a new joint venture with Chinese automaker Geely Auto (GELYF -1.23%) to provide electric-vehicle contract-manufacturing services and related technologies to new and established automakers.

What might be moving NIO's stock today is that the joint venture has named Jack Cheng, NIO's co-founder, as its new CEO, according to a report from Chinese auto-news outlet Gasgoo. 

Two NIO ES8 electric SUVs parked in front of the company's California office.

Image source: NIO.

Former Ford Motor Company executive Cheng joined NIO in 2015 and, together with co-founder (and current NIO CEO) William Bin Li, hired key executives and helped set the company on its current path, though he left in mid-2019. 

Now what

In truth, this news isn't a big deal for NIO, as Cheng had already left the company. It's unlikely to affect the long-term bull case for the company in any significant way. But after NIO's spectacular bull run over the last several months, it doesn't take much news to induce auto investors to do a bit of profit-taking. 

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Stocks Mentioned

Nio Inc. Stock Quote
Nio Inc.
NIO
$14.55 (1.68%) $0.24
Apple Inc. Stock Quote
Apple Inc.
AAPL
$145.54 (-1.07%) $-1.57
Ford Motor Company Stock Quote
Ford Motor Company
F
$13.05 (-3.33%) $0.45
Geely Automobile Holdings Limited Stock Quote
Geely Automobile Holdings Limited
GELYF
$1.61 (-1.23%) $0.02
Hon Hai Precision Industry Co., Ltd. Stock Quote
Hon Hai Precision Industry Co., Ltd.
HNHPF
$6.92 (0.29%) $0.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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