NIO Takes a Breather After ADS Offering

Analysts are still hesitant on NIO

Deputy Editor
Dec 17, 2020 at 12:05 PM
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The shares of Nio Inc (NYSE:NIO) are down 0.5% at $44.45 at last check, after the electric vehicle company completed its stock offering of 68 million American depository shares (ADS). The net proceeds from this offering and additional sales will mainly fund research and development of self-driving technologies, network expansion and penetration, and general corporate intentions. 

After closing just below the 40-day moving average for the first time since April at the start of the week, NIO shares began a steady climb higher. And while the equity is slightly lower today, support at the 10-day, which has served as both support and rejection during the past several months is keeping some of these losses in check. 

Meanwhile, tailwinds in the form of upgrades/price-target hikes might be on the way. Of the seven analysts in coverage, five sport a tepid "hold" rating on Nio stock. Furthermore, the equity's 12-month consensus price target of $40.54 is an 8.2% discount to current levels.

Short interest has been building as well. The 62.40 million shares sold short account for 8.1% of the stock's available float, leaving plenty of pessimism to be unwound.

Also worth noting, NIO is seeing relatively cheap options right now in comparison to the past year. The security's Schaeffer's Volatility Index (SVI) of 1.14% is 25th percentile of its annual range, meaning options players are pricing in relatively low volatility expectations right now. Plus, the equity's Schaeffer's Volatility Scorecard (SVS) sits up at 95 (out of 100.) This means the stock has greatly exceeded these volatility expectations during the past year.


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