NIO-Why Nio Stock Plunged 17.7% in March

Core Viewpoint - Nio's stock has recently hit a 52-week low due to a combination of declining deliveries, increasing losses, and a significant share sale, raising concerns about its financial health and future growth prospects [1][2][5]. Delivery Performance - Nio's delivery numbers showed a year-over-year increase of 62% in February, but a sequential decline of 4.8% [2] - Deliveries from Nio's flagship brand rose 15% compared to January, while its mass-market sub-brand Onvo experienced a nearly 32% sequential drop [3]. Financial Performance - Nio reported a record net loss of $974 million for Q4, a 33% increase year-over-year, despite a 13% growth in vehicle sales [3] - The gross margin improved to 11.7% in Q4 from 7.5% in the same quarter last year, but higher operating expenses impacted profitability due to increased marketing and sales network expansion costs [4]. Share Sale Impact - Nio announced plans to sell approximately 136.8 million shares at a price of 29.46 Hong Kong dollars per share, representing a 9.5% discount to the previous day's closing price, which contributed to the stock's decline to a 52-week low of$ 3.57 [5]. Future Growth Prospects - Nio is focusing on its sub-brands for growth, with Onvo set to launch its second model, the L90, soon after beginning deliveries of the L60 SUV in September 2024 [6]. - Nio expects to deliver between 41,000 and 43,000 vehicles in Q1, indicating a year-over-year growth of approximately 36% to 43%, with revenue guidance suggesting potential growth of 23% to 30% year-over-year [7]. Financial Strategy - Nio is raising funds through share sales to support research and development of EV technologies and new products, while also aiming to strengthen its balance sheet amidst cash burn concerns [8].