5 Investors Still Betting Big on NIO Stock

  • Nio (NIO) is falling lower following the announcement of President Xi Jinping’s third term.
  • The Chinese electric vehicle company is still on the HFCAA list.
  • Shares of NIO stock are down over 70% year-to-date.
NIO stock - 5 Investors Still Betting Big on NIO Stock

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Shares of Nio (NYSE:NIO) are plunging lower after it was announced that Chinese President Xi Jinping had secured a third term. As a result, NIO stock investors are worried that Xi will continue his reign of strict economic controls and crackdowns on tech companies, as well as stringent coronavirus lockdown restrictions. Shares of the electric vehicle (EV) company hit a new 52-week low at $8.38 in response but have recovered higher since.

Enodo Economics’ Diana Choyleva explained:

“Investors are now repositioning for a China where Xi Jinping rules supreme in an echo chamber of sycophants. For him, ideology and national security trump all other considerations, including growth.”

Other experts predict tensions between the U.S. and China will heighten. Trade relations between the two world powers may further deteriorate as Jinping starts his third term.

It’s worth noting Nio is still on the Holding Foreign Companies Account Act (HFCAA) list, along with competitors like XPeng (NYSE:XPEV) and Li Auto (NASDAQ:LI). These companies may be at risk of being delisted from U.S. exchanges if U.S. regulators do not receive company audits for three consecutive years.

The earliest any of these companies could be delisted due to the HFCAA is 2024. Nio has already taken precautionary steps. Last May, the company announced it had listed on the Singapore Exchange.

Despite the risks, many institutions still own shares of NIO. Let’s get into the details.

5 Investors Still Betting Big on NIO Stock

Tracking institutional ownership is important, as these large investors provide liquidity and support for stocks. During the second quarter, 516 funds reported owning NIO, an increase of 11 funds from the prior quarter. Meanwhile, the institutional put/call ratio sits at 1.29, down from 1.41 during Q1. That’s equivalent to 41.51 calls and 53.64 million puts, implying a bearish options stance. With that in mind, let’s take a look at the company’s top shareholders.

  1. Originalwish, investment vehicle owned by CEO William Li: 177.47 million shares. Originalwish’s stake is accurate as of Q1.
  2. Tencent Holdings (OTCMKTS:TCEHY): 164.25 million shares. Tencent’s stake is accurate as of Q1 of 2021.
  3. Baillie Gifford: 96.73 million shares. Baillie purchased 7.98 million shares during Q2.
  4. BlackRock (NYSE:BLK): 61.34 million shares. BlackRock sold 3.24 million shares during Q2.
  5. Vanguard: 50.26 million shares. Vanguard purchased 1.2 million shares during Q2.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

Article printed from InvestorPlace Media, https://investorplace.com/2022/10/5-investors-still-betting-big-on-nio-stock/.

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