NIO Inc.

Investigation
06/28/2022

Initial Lawsuit
08/25/2022

Lawsuit Progression
10/24/2022

Investigation

Continous Holding
March 1, 2021 to July 11, 2022
Proposed Claim
Securities Violation

Did Nio Inc. (NIO) mislead investors about its revenue, net income and sales to Wuhan
Weineng Battery Asset Co.? Was Grizzly Research right? The company formed an independent committee to investigate the matter.

This post is open for investors to gather facts, findings, and track their exposure to related lawsuits. We invite investors and shareholders to contribute to this investigation for their own benefit, add events to the factual timeline below and vote on events’ pertinence.

A lawsuit was subsequently filed. We update this post regularly.

Main Event

Grizzly Research's Short

06/28/2022

Research Report (Short)

Grizzly Research publishes a short report entitled “We Believe NIO Plays Valeant-esque Accounting Games to Inflate Revenue and Boost Net Income Margins to Meet Targets” alleging inflated financials through a related party:

“Allow us to introduce you to Wuhan Weineng (“Weineng”), the convenient difference-maker helping NIO exceed lofty growth and profitability estimates on The Street. Despite being formed by NIO and a consortium of investors in late 2020, this unconsolidated related party has already generated billions in revenue for NIO.

While this rapid growth is impressive on the surface, our investigation has found Weineng might be to NIO what Philidor was to Valeant. Just as Philidor aided Valeant in habitually making numbers, NIO has curiously exceeded estimates since establishing Weineng.

We believe sales to Weineng have inflated NIO’s revenue and net income by ~10% and 95%, respectively. Specifically, we find that at least 60% of its FY2021 earnings beat seems attributable to Weineng. . .“

The stock impact compares the closing price immediately preceding the date of the event and the following closing price. The price difference also reflects the overall mix of information.

Stock Impact

Close	Previous close	Price variation	Percentage variation
$22.36	$22.95	$-0.59	-2.57%

See more on Factual Timeline

Initial Lawsuit

First Complaint - 08/25/2022

An NIO Inc. (NIO) investor filed a class action lawsuit on behalf of persons and entities that purchased or otherwise acquired NIO securities between March 1, 2021 and July 11, 2022, inclusive.

Filing Date
08/25/2022
Class Period
03/01/2021 to 07/11/2022
Transgression
Securities Violation
Filing Firms
Glancy Prongay & Murray LLP
Case Title
Saye v. NIO Inc. et al
Docket Number
1:22-cv-07252
Court
New York Southern District Court
Free File
Complaint

Allegations

According to the complaint, defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects. Specifically, defendants allegedly failed to disclose to investors:

(1) that NIO pulled forward revenue by selling batteries to a related party, which owned the batteries and managed users’ subscriptions;
(2) that, through the related party, NIO also recognized enormous depreciation savings;
(3) that, as a result of the foregoing, the company’s revenue and net loss were overstated; and
(4) that, as a result of the foregoing, the defendants’ positive statements about the company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.