NIO Inc. NIO signed a deal to receive an investment of $2.2 billion from CYVN Holdings LLC, an Abu Dhabi government fund.
The automaker secured the investment while struggling with damping electric vehicle (EV) sales and profitability due to the price war started by Tesla. In an effort to boost efficiency, Nio slashed one-tenth of its workforce and deferred non-core projects.
Per NIO, the transaction is expected to close in the last week of December. Upon the completion of the transaction, CYVN will own 20.1% of the company’s total issued and outstanding shares. Both parties are subject to a few lock-up arrangements for six months after the completion of the transaction, NIO added.
The latest transaction will make CVYN the largest single shareholder of NIO. However, William Li, founder and chief executive of NIO, will retain the maximum voting power.
CVYN will subscribe to 294 million newly issued Class A ordinary shares, priced at $7.50 per share. It will be entitled to nominate two directors to the board.
In July, CVYN invested $738.5 million in NIO. With the completion of that transaction, CVYN owned a total of 7% of NIO’s total outstanding shares.
During the latest reported quarter, the Chinese automaker incurred a net loss of $624.6 million, which widened 8% year over year. Vehicle margin in the third quarter declined to 11% from 16.4% recorded in the year-ago period. Widening losses and price cuts by competitors forced Nio to lower its prices for all models.
Zacks Rank & Other Key Picks
NIO currently carries a Zacks Rank #2 (Buy).
Some other top-ranked players in the auto space are Volvo VLVLY, Stellantis N.V. STLA and BYD Company Limited BYDDY. While VLVLY and STLA sport a Zacks Rank #1 (Strong Buy) each, BYDDY carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for VLVLY’s 2023 sales and earnings indicates year-over-year growth of 4.2% and 70.6%, respectively. The EPS estimates for 2023 and 2024 have increased 8 cents and 7 cents, respectively, in the past seven days.
The Zacks Consensus Estimate for STLA’s 2023 sales and earnings indicates year-over-year growth of 12.3% and 10.5%, respectively. The EPS estimate for 2024 has increased 4 cents in the past 60 days.
The Zacks Consensus Estimate for BYDDY’s 2023 sales and earnings indicates year-over-year growth of 34.2% and 74.7%, respectively. The EPS estimates for 2023 and 2024 have increased 59 cents and 55 cents, respectively, in the past 60 days.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
