After the Rivian fiasco, George Soros invests in NIO
The shares of the Chinese electric car maker NIO are on the upswing among broad Hong Kong stock market gains and have increased their price 17% just this week. NIO's production schedule and market perspectives haven't gone unnoticed by the investment arms of big financial firms like Bank of America whose analysts just upgraded NIO's shares from the Neutral to the Buy category. Analyst Ming Hsun Lee cited the speed with which NIO was able to pull out from the COVID 19-induced production snags in China and the growing interest in its vehicles for the share price upgrade.
NIO's earnings potential has been appreciated by another big name in finance, the billionaire George Soros's Investment Fund, whose first quarter reports disclosed NIO assets acquisition for the first time. The fund got burned with its US$2 billion purchase of shares in electric truck maker Rivian that are now selling for a quarter of their IPO value because of production ramp-up challenges. Rivian was once worth more than many legacy automakers on market cap alone, despite having only delivered a few vehicles, but now the market has come to its senses and is patiently awaiting the electric pickup startup to prove its manufacturing mettle first.
The Soros Investment Fund held 101,796,000 NIO 'Note 2/0' assets at the end of March. The overall US$84.36 million value may not sound like much, but the notes are convertible to NIO shares which are now increasingly starting to look like a better investment for Soros's EV portfolio than Rivian's stock.