Why NIO Stock is down again today

What happened

Shares of Chinese electric vehicle maker NIO (NYSE: NIO) were trading lower on Friday. As of noon EST, shares of the company’s U.S. custodian were down about 5.2% from Thursday’s closing price.

So what

It was not immediately clear why NIO shares were trading lower. There was no negative news from the company – on the contrary, earlier this week NIO reported record deliveries in November and said it was ramping up plans to boost production due to the strong demand.

But there have been a few developments among NIO’s peers that may have prompted some of the company’s investors to take money off the table. A secondary offer from a rival Li Auto (NASDAQ: LI) priced at $ 29 on Friday mornings. This was significantly lower than Thursday’s closing price ($ 32.31), a hint that Wall Street’s appetite for Chinese EV startups may be waning.

NIO shares also fell on Thursday, after a Wall Street analyst downgraded his rating on another rival, XPeng (NYSE: XPEV), from buy to neutrality, essentially saying that after its recent gain of 200% and more, XPeng’s shares appear to be fully valued. (XPeng shares were also down yesterday.)

Now what

As we all know, stocks can go up and down for no apparent reason. In this case, it may be nothing more than traders taking profits or reallocating capital. After the formidable bull run that NIO shares have experienced over the past few months, it wouldn’t be surprising if some investors choose to take profits before the end of the year.

But that said, for auto investors who plan to hold NIO shares for the long term, there doesn’t appear to be any news to worry about on Friday morning.