China-based electric car maker Nio has refuted a short seller’s report claiming that its numbers have been inflated.
Nio’s SGX-quoted shares dropped by more than 10% to trade at US$21.22 thus far today after the short seller’s report was published.
The counter started trading on the SGX on May 20 at US$17.
“The report is without merit and contains numerous errors, unsupported speculations and misleading conclusions and interpretations regarding information relating to the company,” says Nio, which is also quoted in New York and Hong Kong.
“The company's board of directors, including the audit committee, is reviewing the allegations and considering the appropriate course of action to protect the interests of all shareholders,” it adds.
According to Grizzly Research, the short seller, Nio allegedly made use of a separate entity Weineng Battery to buy up batteries used for Nio’s battery-as-a-service segment.
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Grizzly Research claims that by doing so, Nio was able to book an upfront revenue from the sales to Weineng Battery.
Short sellers are known to take a short position on their targeted stocks before issuing negative reports on those companies.
