Nio Stock Is Falling Wednesday: What's Going On?

NIO Inc – ADR NIO shares are trading lower by 7% to $3.71 during Wednesday’s session. The stock is falling after peer Chinese EV maker Li Auto reported a second-quarter revenue miss and issued third-quarter revenue guidance with a midpoint below estimates.

Potential Shared Challenges: Li Auto’s challenges, such as reduced margins due to changes in product mix and pricing strategy, could signal similar pressures on Nio. If Li Auto is struggling with these issues, investors might worry that Nio could face similar difficulties, particularly if these challenges are industry-wide rather than company-specific.

Li Auto’s performance and outlook might also make investors question the overall competitiveness of Chinese EV makers. If Li Auto is showing signs of weakness, it could indicate that the competitive landscape is becoming tougher, which might also affect Nio’s future performance.

Economic and Regulatory Factors: Both companies are also exposed to the same macroeconomic conditions in China, such as domestic demand concerns, regulatory pressures and tariffs. Weakness in Li Auto’s earnings might lead investors to reassess the broader economic environment for Chinese EV makers, leading to a negative impact on Nio’s stock as well.

Read Also: Why Super Micro Computer (SMCI) Stock Is Getting Hammered

How To Buy NIO Stock

By now you're likely curious about how to participate in the market for NIO – be it to purchase shares, or even attempt to bet against the company.

Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy ‘fractional shares,' which allows you to own portions of stock without buying an entire share. For example, some stock, like Berkshire Hathaway, or Amazon.com, can cost thousands of dollars to own just one share. However, if you only want to invest a fraction of that, brokerages will allow you to do so.

In the the case of NIO, which is trading at $3.73 as of publishing time, $100 would buy you 26.81 shares of stock.

If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to ‘go short' a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.

According to data from Benzinga Pro, NIO has a 52-week high of $11.35 and a 52-week low of $3.61.