Nio Slids as Citi Sees Holes in Funding Deal

This post was originally published on this site
© Reuters. © Reuters.

By Yasin Ebrahim – Nio failed to partake in the broad-based rally on Monday after an analyst on Wall Street warned the Chinese electric automaker’s recent funding deal could prove short-term relief but longer-term pain should sales weakness continue.

Citigroup (NYSE:) cut its price target on Nio (NYSE:) to neutral from buy and lowered its price target on the stock to $4.30 from $6.80, sending shares down 3%.

Nio last week secured a financial lifeline after clinching a funding deal with the city of Hefei in China. But the deal will require the company to invest in building a new headquarters, which could throw the company back into financial trouble if sales don’t pick up, Citi warned.

“While the deal will ease (near-term) cash flow pressure on Nio, the collaboration will require Nio to spend a portion of the cash injection on the headquarters move, which may put the company under more pressure in case of prolonged sales weakness.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Add Comment