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Short-Seller Citron Shorts Chinese EV Maker NIO, Target Price $25

November 14, 2020 4:23 am

Beijing (PingWest)—Citron Research, the famous short-seller, pulls the plug on its recommendation on NIO about two years after making a surprising bullish call on the Chinese EV automaker.

"Two years ago, NIO was trading at just $7 when Citron recommended buying the stock as the company and its charismatic leader William Li intrigued us...It is time for investors to rotate out of NIO, enjoy your profits and look for the next disruptive technology," the firm said in its report.

The company believes that NIO's position "can never be justified by its current standing in the China EV market or its near-term prospects," considering Tesla is adopting more aggressive approaches, including lowering prices, expanding production capacity, in China.

“The brand cache of Tesla and its pricing has become a big problem for NIO’s ES6 hatchback mode," said Citron.

The short-seller set a price target for NIO stock at $25 on Friday. The stock of the Chinese EV company has risen more than 12 times this year. Today's opening price reached 51.21 and reached a record high of 54.20 in early morning trading.

According to S3 Partners, short-sellers, who have bet that NIO's stock price will fall, have logged $3.5 billion in mark-to-market losses this year.