Shares of Nio Inc. sank to the lowest prices seen in more than two years, disappointing not only bulls, but also likely the many bears who have just covered their short positions.
While short selling, or bets that stock prices will fall, increased in the auto and truck manufacturing sector over the past month as stock prices declined, China-based electric vehicle maker Nio NIO, -5.54% saw the most short covering of the group, according to S3 Partners.
About $41.4 million worth of shorts were covered in the 30 days to Oct. 13, well above second-place Thor Industries Inc. THO, +0.71%, which saw $25.6 million worth of shorts covered, wrote Ihor Dusaniwsky, managing director of predictive analytics at S3.
Despite the short covering, Nio’s stock was still the seventh most highly shorted in the sector, at $748.1 million. For reference, Nio’s market capitalization was about $1.8 billion.
Nio’s stock dropped 6% in midday trading Friday, putting it on track for the lowest close since July 31, 2020. It has plunged 28.2% over an eight-session stretch in which is had declined seven times, and had plummeted 35.8% over the past 30 days through Oct. 13. In comparison, the S&P 500 index SPX, -1.63% had lost 7.2% in the 30 days through Thursday.
The weakness in Nio’s stock comes even after the EV maker reported an uptick in September deliveries, enough to reach a quarterly record, as China’s economy worsened amid continued lockdowns given the country’s zero-COVID.
Shares of recreational vehicle maker Thor eased 0.3% on Friday, after slipping 2.6% over the previous 30-day period.
Meanwhile, Rivian Automotive Inc. RIVN, -7.78% saw the biggest increase in short selling in the sector, with an increase in the value of shares shorted of $283.1 million in the 30 days to Oct. 13, to a total of $1.7 billion worth of shares shorted, according to S3 data. Ford Motor Co. F, +0.13% saw the second biggest increase in shorts at $213.5 million, to a total of $1.61 billion.
Rivian’s stock slumped 7.8% on Friday, after easing just 0.6% over the past 30-day period, while Ford’s stock lost 1.2% Friday after tumbling 22.8% the over the previous 30 days. Ford is Rivian’s fourth largest shareholder with a 9.6% stake, according to FactSet data.
Tesla Inc.’s stock TSLA, -5.35% is by far the most heavily shorted in the sector, with a short interest value of $13.3 billion, according to S3, or nearly eight times the value of second place Rivian. Tesla was fifth on the list of the biggest increases in shorts over the past 30 days, at $90.1 million.
Tesla’s stock took a 6.1% dive in midday trading Friday toward a 16-month low, reversing an earlier intraday gain of as much as 2.0%. Over the previous 30-day period, the stock had tumbled 19.6%.