What happened
After a string of negative factors drove Nio's (NIO +0.00%) share price down sharply over the last month, some positive news is helping drive a bit of a bounce. The Chinese electric vehicle (EV) maker's American depositary shares (ADSs) popped by as much as 7.8% in early Monday trading. As of 12:13 p.m. ET, they had given most of that back, but were still holding onto a 2.6% gain.
So what
Nio's shares began rebounding on Friday. But news that a Wall Street giant had bought a stake in the company, that a Bank of America analyst had upgraded the stock, and that COVID-19 lockdowns in China were apparently being relaxed had the stock jumping further on Monday.
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In a Form 13F filed with the Securities and Exchange Commission on Friday, billionaire investor George Soros revealed that he had taken a stake in the Chinese EV company. Soros' Nio stake was valued at a little over $84 million as of March 31. While that's not a huge purchase for his $6.5 billion investment fund, it is a new holding, and represents almost 1.3% of the fund's value.
Following that news, Bank of America analyst Ming Hsun Lee upgraded Nio shares to a buy rating Monday morning, CNBC reported. Lee believes Nio's valuation has become attractive as its stock price has dropped, particularly in relation to what he sees as a coming period of growing sales. The upgrade comes with a 3% bump in 2022 sales expectations, and an increase of 8% for 2023 versus prior estimates.
NYSE: NIO
Key Data Points
Now what
Wall Street's growing optimism about Nio also comes as the Chinese government seems to be easing the strict lockdowns it has imposed in some major cities to control a recent COVID-19 outbreak. After Nio stock dropped by more than 25% due to numerous headwinds -- including production delays caused by the lockdowns -- investors on Monday morning were taking their cues from Soros and Bank of America and bidding shares back up.
