What happened
Nio (NIO 2.69%) is wrapping up a solid week, with shares of the electric vehicle (EV) manufacturer jumping 15% so far through 11:30 a.m. ET Friday, according to data provided by S&P Global Market Intelligence. At its highest point during the week, Nio stock was up 23%.
With billionaire investor stakes, analyst upgrades, a new listing, and a milestone in an international market, investors in Nio had every reason to feel excited about this week.
So what
Nio shares had been sinking since April as multiple fears gripped the market. Nio suspended operations in China amid COVID-19 lockdowns, its deliveries in April slumped 49% sequentially, and the company found itself on the U.S. Securities and Exchange Commission's (SEC) list of foreign companies that have failed to comply with the audit rules and are therefore at risk of getting delisted from the U.S.
This week's rally in Nio shares is, therefore, even more pronounced as it appears to signal the stock's bottoming after its recent free fall. Investors perhaps saw an opportunity to buy Nio shares on the cheap this week ahead of earnings. The company hasn't announced a date yet, but typically reports in late May.
Image source: Getty Images.
Bank of America analyst Ming-Hsun Lee even upgraded Nio stock's rating to buy earlier this week with a price target of $26 per share as the analyst believes Nio's sales and margins will improve in the second half of the year and that the stock's valuation was therefore attractive after its sharp recent fall. The price target represented almost 80% upside from Nio stock's previous-day closing price.
In between, billionaire investor George Soros revealed a stake in Nio as of March 31, and that unsurprisingly boosted investor interest in Nio as Soros is a hugely popular investor and added Nio for the first time in his multi-billion dollar hedge fund.
Soros, though, isn't the only one doing so. Ark Invest CEO Cathie Wood recently bought Nio stock for the first time, and the world's largest hedge fund, Bridgewater Associates, upped its stake in Nio by a whopping 73.5% in the first quarter versus the fourth quarter according to its latest filing dated May 13.
Meanwhile, just this morning, Nio debuted its stock in Singapore, marking its second such secondary listing outside the U.S. after having already listed in Hong Kong in early March.
Nio's move to list its stock in Singapore comes close on the heels of the SEC's latest warning, and it's reassuring to see management's proactiveness in providing investors with alternative places to trade Nio shares in the event Nio stock gets delisted from the U.S.
The thing is, there's more to Nio's move to list in Singapore than just this.
Now what
Calling its listing in Singapore a milestone that strengthens the company's "footing in the global capital markets," Nio also announced today that it'll establish a research and development (R&D) center in Singapore focused on its artificial intelligence and autonomous driving programs.
Nio shares surged ahead of its Singapore listing as investors noted how dual-listing could also work in the company's favor in the long run. And now that Nio has also announced an R&D center in Singapore, it might have bigger plans for the island nation as it strives to expand its global footprint.
For that matter, Nio currently sells only in Europe outside of its home market China. Just this week, it delivered its 500th EV in its first international market, Norway, as reported by China-based new energy vehicle-focused website CnEVPost.
With Nio's earnings around the corner and many expecting the company's growth to pick up in the coming months, the market sees greater upside in Nio stock from here and could drive it even higher if the EV maker's numbers and growth plans impress.
