NEW YORK, April 07, 2019 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against NIO, Inc. (“NIO” or the “Company”) (NYSE: NIO) and certain of its officers. The class action, filed in United States District Court, Northern District of California, and indexed under 19-cv-01644, is on behalf of a class consisting of all persons other than Defendants who purchased or otherwise acquired, the ADSs of NIO between September 12, 2018 and March 5, 2019, both dates inclusive (the “Class Period”). Plaintiff seeks to recover compensable damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”).
If you are a shareholder who purchased NIO securities during the class period, you have until May 13, 2019, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com . To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
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NIO designs, manufactures and sells electric vehicles in the People’s Republic of China (“PRC”), the U.S., Germany and the United Kingdom (“U.K.”).
The Company launched its first volume manufactured electric vehicle, the seven-seater “ES8,” in December 2017 and started delivering vehicles to customers in June 2018. The ES8 is an all-aluminum alloy body, premium electric SUV that NIO states offers exceptional performance, functionality and mobility lifestyle.
The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: Defendant Bin Li's representations that he was "pleased with the solid ramp-up in production and delivery in 2018" and Nio was "strengthening our brand to support our future growth" notwithstanding seasonality or market conditions were materially false and misleading because he failed to disclose that Nio ES8 deliveries were not growing, but, in fact, had materially declined. Further, Li's representation that December 2018 deliveries "accelerated" in anticipation of expected EV subsidy reductions in China in 2019 was materially false and misleading because he failed to disclose that deliveries stopped accelerating, but, in fact, were materially declining. The Complaint further alleges that the Company's representations that Nio's revenues were materially growing were materially false and misleading because they failed to disclose that, by the beginning of the Class Period, sales of ES8s and revenues had stopped growing and were materially declining. Indeed, Nio sales in January 2019 fell off a cliff, declining over 45% from December 2018 sales. Furthermore, Defendants' failure to disclose in Nio's Management's Discussion and Analysis of Financial Condition and Results of Operations that E8S deliveries and related revenue had materially declined in January 2019 and that the negative trends affecting Nio sales and revenues would continue through the first quarter and into the second quarter of 2019. In addition, the defendants' representation that Nio management "expects the demand to be resilient" was materially false and misleading because at that time demand for Nio's ES8 had already materially declined and the Company was experiencing material negative trends that would negatively impact Nio vehicle sales and revenues through at least the second quarter of 2019. On January 29, 2019, after the close of trading, the Company filed a report with the Securities and Exchange Commission on Form 6-K that contained “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that repeated the Company’s sales through December 31, 2018 and disclosed a proposed offering of $650 million in convertible senior notes.
Sell-side analysts took note of NIO’s January 30, 2019 conference call to discuss the proposed issuance of $650 million in convertible notes, during which NIO’s management reassured investors that demand was strong for the ES8 and ES6 and that any change in Chinese government subsidies would have not have a significant impact on NIO because premium car buyers are less price sensitive and that NIO management expects demand to be resilient. In other words, NIO represented that even if the Chinese government subsidies would have not have a significant impact on NIO because premium car buyers are less price sensitive and that NIO management expects demand to be resilient. In other words, NIO represented that even if the Chinese government lowered or eliminated electric car subsidies, demand would remain strong for its vehicles.
On January 30, 2019, NIO ADSs increased from a closing price of $6.94 per ADS on January 29, 2019, to close at $7.46 per ADS on January 30, 2019, an increase of $0.52 per ADS, or over 7%, on heavier than usual volume of over 28 million ADSs.
February 4, 2019, the Company disclosed the closing of the $650 million convertible senior notes offering.
On February 24, 2019, a segment aired on 60 Minutes concerning NIO. Defendant Li represented that NIO exceeded its goal of delivering 10,000 cars in 2018 and was ramping up production.
On February 25, 2019, the following trading day, NIO ADSs increased from a close on February 22, 2019, at $8.17 per ADS, to close at $9.00 per ADS on February 25, 2019, an increase of over 10% on heavy volume of over 52 million ADSs.
Then, just nine days later, on March 5, 2019, after the close of the market, NIO disclosed its fourth quarter and full year ended December 31, 2018, financial results. Defendants shocked investors when they disclosed that for January 2019, the Company delivered 1,805 ES8s, a decline of over 45% from December 2018, and for February 2019, the Company delivered 811 ES8s, a decline of over 55% from January 2019 deliveries. Further, the Company stated that it expected between 3500 and 3800 ES8 sales for the quarter ending March 31, 2019—just 884-1184 sales in March 2019, representing a decline of over 52% over fourth quarter 2018 sales.
On March 6, 2019, NIO’s ADSs declined from a closing price on March 5, 2019, at $10.16 per ADS, to close at $8.01 per ADS, a decline of $2.15 per ADS, or over 21%, on heavy trading volume of over 73 million ADSs. On March 7, 2019, NIO’s ADSs declined an additional $0.92 per ADS, or over 11%, to close at $7.09 per ADS.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com .
CONTACT: Robert S. Willoughby Pomerantz LLP rswilloughby@pomlaw.com
