Please ensure Javascript is enabled for purposes of website accessibility

Why Nio Stock Popped Monday

By Howard Smith – Nov 8, 2021 at 12:31PM

Key Points

  • Investors will be watching to see if Nio's adjusted earnings will become positive this reporting period.
  • Some investors are selling Tesla shares today, and may be diversifying into other electric vehicle names.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors are bidding Nio shares up ahead of its quarterly financial update tomorrow.

What happened

Like many automakers, Nio (NIO 0.25%) tempered expectations for its third-quarter deliveries due to supply chain constraints. But the company exceeded that revised guidance when it reported 24,439 vehicle deliveries for the third quarter. The company reports its financial update tomorrow, and its shares are jumping today in anticipation. As of 11:40 a.m. EST, Nio shares were up 3.2% after popping almost 5% earlier in the session. 

So what

Besides anticipation for Nio's quarterly financial report, some investors may also be diversifying away from electric vehicle (EV) leader Tesla shares today after CEO Elon Musk said he may sell 10% of his shares. Tesla shares fell on that news, and some of those funds may be going into what some investors hope becomes the Chinese Tesla. 

Black Nio ES8 electric SUV in front of charging hardware.

Image source: Nio.

Now what

On Oct. 1, Nio told investors its third-quarter deliveries doubled year over year as it navigated headwinds from the global semiconductor shortage and other supply chain disruptions. The company exceeded its previously lowered guidance, and investors are now anticipating the quarterly financial update that comes out tomorrow. In its second-quarter release, Nio reported a non-GAAP (adjusted) net loss of about $52 million, and investors will be watching to see if that moves into positive territory. 

Earlier this month, Nio reported a drop in vehicle deliveries in October as it upgraded its manufacturing lines to expand capacity as demand grows. Investors will be looking for any update on whether November deliveries are back on the previous growth trajectory. 

Some of today's stock move is likely anticipating tomorrow's report. But with Elon Musk's every move monitored, his potential large sale of Tesla shares may also be contributing to money moving into Nio today. 

Howard Smith owns shares of NIO Inc. The Motley Fool owns shares of and recommends NIO Inc. and Tesla. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.