NIO) Price React If Nio Inc. Acquires JAC Plants?

The Nio Inc. (NYSE: NIO) company may be interested in acquiring some factory assets from JAC, as per some sources, which is its manufacturing partner as well.

The JAC plans to sell and divest two of the plants where it used to manufacture vehicles for Nio. As per the sources, the analysts thinks and believes that this deal might turn out to be one of the beneficial factor and advantageous for NIO stock.

This will probably grant the company more control over production and help in reducing the risks of supply chain disruptions and production hiccups.

Additionally, analysts highlight Nio’s strong brand presence, a wide-ranged customer base, and an advanced ecosystem encompassing software, services, and energy solutions.

Probable Effect Of Acquisition On Nio Inc. (NIO) Stock

If the market investors view this deal as a positive sign and a benefit factor. The NIO price may be able to rise as a result of a surge in demand and confidence, and it would be like an icing on the cake.

As it is relying on JAC, after Nio successfully acquires the company, this might simultaneously boost and improve production capacity and product quality.

This transaction may also be able to help improve and enhance Nio’s profitability and efficiency by reducing its dependence on JAC. This may also give a hand to improve Nio stock’s long-term valuation and make the company more reliable.

Conversely, if the market investors, view or interpret this transaction on acquisition as a negative indication of Nio Inc. financial health and more associated risks.

This may lead Nio stock price to fall due to probably decreased demand and weakened investors’ confidence. This could weaken Nio’s probable short or long-term performance. Additionally, the transaction may potentially harm or it can have adverse effects on Nio’s liquidity by increasing debt and cash outflows.

About Nio Incorporated

Nio Inc. is a prominent player in the electric vehicle (EV) industry sector, which is headquartered in Shanghai, China. The company was established and incorporated in 2014.

The Nio has evolved to become a leading force in designing, developing, manufacturing, and selling smart electric vehicles within the area of China’s territory.

What Does Nio Do?

It offers various range of EV vehicles, including the five and six-seater electric SUVs, as well as innovative smart electric sedans.

Beyond the vehicles zonal, NIO also provides an array of power solutions such as home charging with Power Home, battery swapping through Power Swap, mobile charging services with Power Mobile, and an application, Power Map, to access real-time information on public chargers.

Additionally, Nio also offers a variety of services including repair, maintenance, insurance coverage, roadside assistance, and auto financing to ensure a good and comprehensive EV ownership experience.

Furthermore, the company is actively engaged in the development of cutting-edge technology and design, manufacturing e-powertrains, battery packs, and essential components for electric vehicles.

Its holistic and genuine approach to customer satisfaction involves energy and service packages while also providing a platform for used vehicle inspection and sales, known as NIO Certified.

The company has come a long way since its inception in 2014 when it was originally named NextEV Inc., subsequently adopting the name NIO Inc. in July 2017.

This evolution signifies NIO’s journey from a conceptualized idea to a thriving enterprise, highlighting its dedication to the EV market’s growth and its vision for the future of smart electric vehicles in China and beyond.

Ownership Breakdown of NIO stock

According to the financial website, the ownership breakdown consists of 32.4% institutional holdings, 44.5% general public holdings, 9.3% individual insiders, 7.0% government, 6.8% public companies, and 0.002% private companies.

Who is the Top Shareholder of Nio?

The co-founder, William LI is the top shareholder of Nio Incorporated. The co-founder holds the ownership of 9.3% with a current value of $1.2 Billion with a share count of 165,467,776.

Financial Details About Nio Stock

In the current Q3 report, the reported EPS was knocked out by the surprise of -10.57% by the analysts’ estimate. The reported EPS was -$0.40 for the same quarter compared to -$0.30 a year ago. This shows year-over-year change of -33.33% of EPS decline.

The next quarter’s revenue is estimated to be $3.01 Billion and an estimated EPS of -$0.29, the report will be released on March 21, 2024.

For the next fiscal year 2024, the analysts’ estimate for earnings of -$0.84 suggests a change of +42.06% from -$1.45 which Nio is expected to report in 2023.

Furthermore, Nio reported revenue of $2.647 Billion in the recent reported quarter for the period ending September 2023. It missed by a surprise of -0.23% as compared to the analysts’ estimate of $2.653 Billion, also representing a year-over-year change of +44.80 %.

For Nio, the current quarter’s analysts’ revenue estimate of $2.65 Billion suggests a year-over-year change of +44.02%.

For the current and next fiscal years, revenue estimates of $8.59 Billion and $13.12 Billion indicate changes of +16.71% and +52.73%, respectively

Is Nio Stock A Good Buy For The Investors?

Nio stock past price action analysis

Nio Inc. (NYSE: NIO) stock has been advancing from $2 since April 2020 and smoothly reached a high of $66 which is also the stock’s all-time high on the daily time frame.

A closer look at the chart showed that the stock showed a wonderful performance on the chart. It has been providing investors with a nearly 30x return on their investment in nearly 7 months span till January 2021.

Why did the Nio Stock Start Falling?

However, after achieving the high in the stock, the investors were amazed at the returns and started booking their profit. They were eagerly holding their horses to take out all the profits they made.

Afterward, the NIO share started slipping more as the stock’s financials dropped and it gave continuous negative earnings. This led to form bearish price action and price declined from a downward trendline drastically and made streaks of lower lows and highs.

What’s the Outlook For NIO Share in 2024?

Since facing a drastic fall the stock lost the major confidence of investors, but at $7 the stock formed a support after a long fall. At press time, it is trading at the same support with the CMP of $7.44.

Therefore, if NIO share fails to hold its grip and continuously declines and breaches below $7, which is an important level, it may hit $6 or go beyond as well.

On the contrary, if buyers boost more and the price starts to show significant strength in momentum, the NIO price might surge in investors’ confidence from the current level and the price may head upward. The possible targets would be between $8 and $9.

What Technical Tools Say About Nio Stock?

The current value of RSI is at 34.37 points. The 14 SMA is below the median line at 37.64 points which indicates that the NIO price is bearish and signals weakness in the momentum of the stock price.

At the time of publication, the long-term 200 EMA, and the short-term 20 and 50 EMA, show bearish pressure in the NIO price.

Summary

The Nio Inc. (NYSE: NIO) stock has shown interest in the acquisition of its manufacturing partner JAC, as JAC is up for its two plants to sell. The price action in the stock shows uncertain conditions and both direction scenarios. However, technical tools provide solid bearish signals in NIO stock.

Technical Levels

Support Levels: $7 and $6

Resistance Levels: $8 and $9

Disclaimer

In this article, the views, and opinions stated by the author, or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.