BENSALEM, Pa.--(BUSINESS WIRE)--Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Nio Inc. (“NIO” or the “Company”) (NYSE: NIO) securities issued in connection with the Company’s September 2018 initial public offering (“IPO” or the “Offering”). NIO investors have until May 13, 2019 to file a lead plaintiff motion.
Investors suffering losses on their NIO investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to email@example.com.
In September 2018, the Company completed its initial public offering (“IPO”), selling 183 million American Depositary Shares (“ADSs” or “shares”) at a price of $6.26 per share. Each ADS represents one share of common stock. The Company received proceeds of approximately $1.15 billion from the IPO, net of underwriting discounts and commissions. The proceeds from the IPO were purportedly to be used for research and development of products; selling and marketing and development of sales channels; development of manufacturing facilities and roll-out of its supply chain; and general corporate purposes and working capital. Notably, approximately $238.7 million was to be used for the development of its Shanghai manufacturing facility.
Then, on March 5, 2019, the Company announced that it would no longer build its own manufacturing plant and would instead rely on state-owned manufacturer, JAC Auto. The Company also reported that electric vehicle deliveries fell due to anticipated subsidy reductions in China in 2019.
On this news, the Company’s share price fell $3.07, or over 30%, over the next two trading days to close at $7.09 per share on March 7, 2019, on unusually heavy trading volume.
On May 9, 2019, the Company’s share price closed at $4.60 per share, which is a decline of $1.66, or approximately 27%, from the IPO price of $6.26.
The complaint filed in this class action alleges that the Registration Statements were false and misleading and omitted to state material adverse facts. Specifically, Defendants failed to disclose to investors: (1) that the Company would not build its own manufacturing plant; (2) that, instead, the Company would rely on JAC Auto, a manufacturer owned by the Chinese government; (3) that reductions in government subsidies for electric cars would materially impact the Company’s sales; (4) that the number of registered users of the Company’s mobile application did not reflect the active user base; and (5) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
If you purchased shares of NIO, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to firstname.lastname@example.org, or visit our website at www.howardsmithlaw.com.
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