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Citron Takes Profits In EV Maker NIO, But Still Loves The Company: 'This Is Just Trading On Emotion Here'

February 26, 2019 12:27 pm
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Three months after first making a bullish call on Chinese electric vehicle maker NIO Inc – ADR (NASDAQ:NIO), Citron Research’s Andrew Left told Benzinga he has taken profits on his winning stake.

NIO's stock is up another 27 percent this week after being featured on an episode of "60 Minutes" Sunday night. The episode compared NIO favorably to popular U.S. EV maker Tesla, Inc. (NASDAQ:TSLA).

Left told Benzinga he still loves the company, but he’s opting not to be greedy after making a 50 percent gain on his position.

“This is just trading on emotion here,” Left said, mentioning that the stock has become "retail FOMO." Including this week's gain, NIO is higher by 66 percent in the year-to-date period.

"There's plenty of market here to allow Tesla to play and Nio to play," auto analyst Michael Dunne told "60 Minutes."

Left’s Winning Call

Left first compared NIO to Tesla back in November and said the stock was like a ticking time bomb.

NIO’s massive outstanding short position and its strong management team make it a dangerous short on China and the ongoing trade war, the short seller said in November.

“After years of battling the ‘Tesla Story,’ Citron learned to recognize the opportunities created by total industry disruption and to disregard today's numbers when considering the value of the disruptor."

NIO has a cult-like following similar to Tesla and has a committed base of long-term investors, Left said.

Like Tesla, NIO has a brand value that extends beyond its quarterly numbers, according to Citron.

“NIO is not just a car company, it is a lifestyle and a brand that is ready to disrupt and the implications for the stock price cannot be ignored,” Left said in November.

Left said NIO also has the benefit of learning from Tesla’s mistakes as it has struggled to launch and scale up its business.

NIO's stock traded around $10.33 per share at time of publication.

Related Links:

Analysts React To SEC Action Against Elon Musk

New Chinese EV Maker Nio Surges On First Earnings Print

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