NIO Inc. (NIO) Pulled Forward Revenue by Selling Batteries to a Related Party Thereby Overstating Its Revenue Growth
A shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired NIO Inc. (NYSE: NIO) securities between March 1, 2021 and July 11, 2022, for violations of the Securities Exchange Act of 1934. NIO designs, develops, manufactures, and sells smart electric vehicles.
According to the complaint, on June 28, 2022, Grizzly Research published a report alleging, among other things, that NIO inflated its net income by about 95% through sales to a related party, Wuhan Weineng Battery Asset Co. (“Weineng”). On this news, the Company’s American Depositary Shares (“ADSs”) fell $0.59, or 2.5%, to close at $22.36 per share on June 28, 2022.
Then, on July 11, 2022, NIO announced that it formed a special committee to oversee an investigation into the allegations in the Grizzly Research report. On this news, the Company’s ADSs fell $2.03, or 8.9%, to close at $20.57 per share on July 11, 2022.
Next Steps: If you acquired shares of NIO Inc. between March 1, 2021 and July 11, 2022, you have until October 24, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.