What happened
Nio (NIO 3.49%) stock opened steady this morning and looks set to end the week on a solid note -- shares of the electric vehicle (EV) manufacturer were trading 5% higher Thursday and are up almost 26% so far this week, as of 11:30 a.m. ET today.
Nio is about to list its shares on a third stock exchange, and this move comes just days ahead of its expected quarterly earnings release.
So what
After listing in Hong Kong in March, the company is all set to debut in Singapore tomorrow, according to an update from CnEVPost, a China-based website focused on new energy vehicles. With this move, Nio will become the first such automaker to list on stock exchanges in the U.S., Hong Kong, and Singapore at the same time.
Image source: Getty Images.
The company's decision to list on multiple stock exchanges comes after the U.S. Securities and Exchange Commission (SEC) tightened scrutiny on foreign companies to open their audit reports for inspection by its regulators or face the risk of their shares getting delisted from the U.S. stock exchanges. Earlier in May, the SEC named Nio as one of the many foreign companies with inaccessible audit reports.
Chinese stocks have especially come under the SEC's eye given the nation's long-standing audit dispute with the U.S. And since it's more a feud between the U.S. and China than the U.S. and individual companies, there's only so much a company like Nio can do.
On its part, though, Nio is now listing its shares in Singapore and Hong Kong to provide its investors in the U.S. with alternatives to trade their shares in the event the stock gets delisted from the U.S.
Now what
Although Nio hasn't specified the reasons behind its decision to go for a second secondary listing after Hong Kong, dual-listing, or listing on multiple stock exchanges, has certain advantages that could later come handy to the company, such as higher liquidity and access to capital in more markets.
To be sure, its Singapore listing doesn't affect investors for now. Yet investors are perhaps taking note of the company's proactiveness to swiftly list shares on multiple stock exchanges in anticipation of the worst.
With Nio also expected to report quarterly numbers in the coming weeks (it hasn't announced a date yet but typically reports numbers late May) and the stock taking a beating in recent months, the market now sees any positive update as an opportunity to bid the EV stock higher.
