Shares of NIO Inc. were knocked down by a short-seller report on Wednesday, alleging exaggerated financial results, even as the China-based electric vehicle maker said the report is without merit and contains “numerous errors.” The stock
fell 2.5% in morning trading, putting it on track for a third-straight loss. It was down as much as 2.9% earlier in the session, and was down as much as 9.0% in premarket trading, according to FactSet’s time-and-sales data.
At Wednesday’s intraday high of $22.28, it was down just 0.4%. Grizzly Research, which has bet that NIO’s stock will fall, said it believes that sales to Wuhan Weineng Battery Asset Co., which Grizzly says was formed by NIO and a consortium of investors in late 2020, has helped NIO inflate revenue by about 10% and net income by 95%. “The [Grizzly Research] report is without merit and contains numerous errors, unsupported speculations and misleading conclusions and interpretations regarding information relating to the Company,” NIO said in a statement. “The Company’s board of directors, including the audit committee, is reviewing the allegations and considering the appropriate course of action to protect the interests of all shareholders.” NIO said in its most-recent annual report that “affiliate” Wuhan Weineng is an “equity investee” of the company. As part of NIO’s “Battery as a Service” (BaaS) offering, which allows customers to buy an EV and subscribe for the use of the battery separately, the company sells a battery to Wuhan We …