NIO Inc. (NYSE: NIO) today provided an update on its status under the Holding Foreign Companies Accountable Act. The NIO stock has been losing value since the update was out. Moreover, the stock is nearing its 52-week low.
NIO is aware that the company has been provisionally identified by the SEC under the HFCAA on May 4, 2022 U.S. Eastern Time. The company understands such identification may result from its filing of the annual report on Form 20-F for the fiscal year ended December 31, 2021.
NIO understands the SEC made such identification pursuant to the HFCAA and its implementation rules issued thereunder, and this indicates that the SEC determines that the Company used an auditor whose working paper cannot be inspected or investigated completely by the PCAOB, to issue the audit opinion for its financial statements for the fiscal year ended December 31, 2021.
In accordance with the HFCAA, if the SEC determines that the Company filed an annual report containing an audit report issued by a registered public accounting firm that has not been subject to inspection for the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit the shares or American depositary shares of the Company from being traded on a national securities exchange or in the over-the-counter trading market in the United States.
NIO has been actively exploring possible solutions to protect the interest of its stakeholders. On March 10, 2022, the Company completed a secondary listing of its Class A ordinary shares on the Main Board of the Hong Kong Stock Exchange (HKEX) under the stock code 9866. The Class A ordinary shares listed on the HKEX are fully fungible with the ADSs listed on the NYSE.
The NIO stock was down by a huge 13.57% and traded at $15.67 (down by 2.46 points) at 12:00 p.m. EDT in the market trading session today. The market capitalization of the stock stood at $29.57 billion. The share volume traded for the NIO stock was 44,968,039, much lower than the average share volume of 70,874,414.