• Jerremy Alexander Newsome

Our thoughts on the NIO IPO

Hi traders :)

The trees are changing colors, the houses are covered in lights, the holiday season is finally here and I am loving it! It's always wonderful seeing family and friends during a beautiful time of the year. Let's getting into the trading talk though! We've taken a break from the Chinese IPO's for a bit over the last couple of months but I wanted to bring it back for this IPO. I wonder if you have heard about this one before! Let's learn about NIO!

Okay, we've all heard about the great and powerful Tesla, but the general public doesn't often hear about the Chinese electric vehicle company NIO. (You probably have because you are awesome.) NIO is a Chinese automobile manufacturer that specializes in designing and developing electric autonomous vehicles. With currently over 4,000 employees across 10 locations, it's no wonder that this company is making waves. NIO currently has 2 cars already in production (ES8 and ES9) and 1 concept car (EVE). I highly urge you to google these cars. EVE, in particular, is a fully autonomous vehicle without steering wheels or any traditional "car" navigation pieces (estimated to hit production in 2020). It's breathtaking inside and truly unique. Another cool feature to note is Nomi, NIO's artificially intelligent assistant. Nomi's job is to learn the interests of the drivers and passengers and using this information to cater to their needs. Eve is set to be completely centric around Nomi. Ah, I feel like there is so much information that I could talk about but I am going to leave this company with a little mystery so that you can do some of the searching for yourself!

At only 4 years old, this company is still a toddler, so don't prepare to be wowed yet by the financials. Right now they make money off of their models. And like Tesla they are in huge amounts of debt. A most recent report shows NIO's revenue at $6,951,000 and net income of $-502,565,000. However, the future is promising. According to NIO, the amount of delivered vehicles from production is ramping up. As you can see in the chart, below the numbers keep growing at quite a fast rate. NIO has noted that they expect these numbers to slow a bit during October for the Chinese holidays but still remains on track for its goal of 10,000 ES8's in the second half of 2018. It is important to note that Tesla and NIO are at two different parts of their life cycles, but if you can remember, production output was a major set back when it came to TSLA early on. But it seems to be of little issue to the new NIO at the present moment.

We already know that TSLA is a competitor of NIO but who else is. Anyone in the electric vehicle sphere is a competitor to some degree. Right now the Tesla, Nissan Leaf, and Denza are the only non-chinese Electric vehicles sold in China. Lucid Motors and Faraday Futures both show promise in the Electric vehicle world but are both headquartered in the US. Many Chinese EV include Byton, BYD, BAIC, Zhidou, Changjaing EV, and Kandi are just a few. However, the deciding factor for most of these companies will be can they get their models to production. And the answer for most is no.

The RLT team is actually in a bullish set up right now. I like the volume that came in on the 11/19 candle. If and when NIO can break above $8.38, we could easily see some upside. There are quite a few Real Life Traders in this stock already. Some have been buying shares and selling covered calls already. 

This wraps up another jam packed article about the NIO IPO. I hope you found it enjoyable and intriguing! I have to say I love looking at the vehicles of the future. It gives me so much hope. Please let me know if you have any other upcoming IPO's that you want to learn about! You are incredible!

~ Ashley

"The art of being happy lies in the power of extracting happiness from common things." - Henry Ward Beecher