Nio Inc, a Chinese electric-vehicle company, saw its shares rebound on Friday after a significant decline the previous day. The downturn was triggered by a lawsuit filed by Singapore’s sovereign wealth fund, GIC, which alleged that Nio had misled investors by inflating its revenue. The lawsuit, filed in the Southern District of New York, claimed that Nio’s actions resulted in “significant losses” for GIC.
According to the lawsuit, Nio issued statements that artificially inflated the value of its securities. The company, however, has denied these allegations, stating that they stem from false claims made in a 2022 short-selling report by Grizzly Research. Nio did not immediately respond to requests for comment on the matter.
The lawsuit was filed in August, and its revelation led to a drop in Nio’s stock price, with shares falling as much as 9.8 percent in Singapore and 13 percent in Hong Kong on Thursday. Despite this, Nio’s shares recovered on Friday, rising 2.86 percent in Singapore and 2.48 percent in Hong Kong by midday.
Nio, which designs, develops, manufactures, and sells electric vehicles, had raised $1.2 billion through a share sale last month. The company is listed in the United States, Hong Kong, and Singapore, and has been working to expand its operations. However, it lags behind its Chinese rivals, including BYD and Geely.
Analysts from Morningstar Research Pte Limited noted that while the allegations may impact Nio’s corporate governance, they do not expect it to have a significant effect on the company’s operations. The analysts cited the ramp-up of new car production, including the ES8 and Onvo L90 models, as a factor that could support near-term share prices. They also predicted that vehicle sales and improved profitability would likely have a positive impact on the company’s stock.
The developments surrounding Nio come as the electric vehicle industry continues to grow and evolve. The company’s ability to navigate the challenges posed by the lawsuit and maintain its operations will be closely watched by investors and industry observers. With its rebound on Friday, Nio’s shares may be stabilizing, but the outcome of the lawsuit and its impact on the company’s future remain to be seen.