In the US stock market, there is a special group of stockholders. They were convinced by the charisma of the founder and believed that its future could be comparable to Tesla.
When the stock price was at its lowest point, they decisively added their positions, and together with the company created a miracle of wealth.
The story is about Chinese electric vehicle (EV) maker NIO (NYSE: NIO) and its stockholders.
So far this year, NIO's stock is up about 600%. If you count from a low of $1.19 on Oct. 2 of last year, NIO is up a whopping 2000% over the past year, for a total market capitalization of $42 billion.
Those who lost touch with Tesla's surging share price turned their energy and attention to NIO. In this land of desire, where various versions of wealth stories are circulated, there are overnight riches, but also a lot of sadness and remorse.
As a rough calculation, even if you did not bottom out in the stock price of NIO, just in the past year, NIO has become a super tenfold stock. "Any buy can double," in the view of a retail investor, "this is a fool's chance to make money".
Rational investors, however, believe that this is ultimately a game of dabbling in luck and gambling, and that very few people will be able to take all tenfold stocks. What's more, whether on the crest of a wave or the bottom of a trough, "it's important to stand firmly behind NIO".
WeChat account Auto-time interviewed four investors who bottomed out on NIO stock to hear their own experiences of wealth creation. Here's what the interviewees had to say.
"Back the man up"
Before contacting NIO, I was a pure white guy, never touched the stocks, and also resent stock trading, always thought it was a bad thing.
It wasn't until my ex-boyfriend took my 2 million RMB to speculate in stocks and suddenly lost over 1 million RMB one day that I started to pay attention to stock market information.
At that time, I looked around and didn't know which one to buy. Then I remembered that I had brushed up on the NIO William Li Bin, the worst man in 2019, which was the first time I knew about NIO.
Because the same entrepreneur, after reading the article has a feeling of solidarity, touched by many of the plots.
I am more honest, belonging to the kind of people who often suffer losses, so it arouses a lot of empathy. At that time I thought, I don't know what to buy then buy NIO, support this man.
In this new car, I have investigated the background and personality of several founders, and I admire William Li Bin, an entrepreneurial senior, and I am completely impressed by his charisma.
NIO stock has been in the sideways phase, the new leeks know nothing, the will is not firm, it is easy to be led to the rhythm, follow the public opinion or market sentiment, slowly sold some.
Until one day to catch NIO stock prices rose relatively large, I have a more in-depth understanding of the company, can feel that this is a growing enterprise, but also determined my faith in NIO.
After that I kept increasing my position, from 100,000 RMB to 100,000 USD, heavily investing in NIO.
At that time, many people advised me that it was difficult to make money on NIO, and I felt that it was okay to put it there if I didn't make money. My idea is very simple, choose the stock is to choose the company, it is equivalent to lending money to it so that it can be better developed.
In June this year, I kept recommending NIO shares to my friends, but everyone ignored me, how to brainwash has not been successful.
By August, I had almost earned an NIO ES8, and I didn't even get a chance to test drive it, so I just ordered one.
I didn't even have a driver's license before placing the order. But after comparing some specs, I feel it's an honestly designed and user-conscious car, and I feel safe buying it.
It's easy for a white guy to get lucky. On October 13 of this year, an option originally purchased for $20,000 was about to expire and be voided, having lost about 95% of its value the day before, and the price was so far off that it was impossible to get it back.
Normally, selling it right then and there would have saved $1,000 or $2,000 of capital back.
But I was in the mindset of dying together and didn't sell, thinking it didn't matter, the worst that could happen was that I would make it back later. It turned out to be an overnight flip, making $30,000 or $40,000.
In retrospect, I may be considered a special one in the stock market, lucky, the first stock I picked was NIO.
I was also in a better frame of mind, and I would have been able to accept it if I had to spit out all my profits. The money earned by luck is not so heavily valued.
I have always insisted on going long NIO, from more than a dollar to now, I think its stock price is not an unexpected rise, but a normal return to value.
I've always believed that NIO, the brand, has been undervalued.
Perhaps in the capital market, the focus is on profitability, and if there is no early profitability, it is difficult to be recognized.
But if you look at it from a different angle, if you wait until all the numbers have turned positive, it's not something you can buy at this price now.
Now the deck is becoming clearer and clearer, I actually do not understand the K-line chart, nor do I understand the PE, P/E ratio, but if the Chinese auto companies must have a ranking, then the first must be NIO. Pick a stock, not buy the first to buy who?
It's actually a very simple decision-making process. That's why we, the new leeks, were able to bottom out NIO at a much cheaper price than the investment institutions, I guess.
"Lose money almost every day"
I am a former employee of NIO. When I first went to NIO for an interview, I thought it was very rare to find a company in China that makes cars properly.
Most companies only care about gross margin, net profit, and they don't even think that car owners will repurchase or recommend their friends to buy a car. But NIO successfully blazed that trail.
Later, everyone wanted to imitate it, even many traditional OEMs, who contacted us in various ways.
A lot of people left NIO in 2019 and as things got better at NIO, many of our colleagues are going back this year.
We are all very angry when we read those bad articles about NIO, even though we don't work at NIO anymore.
In any case, William Li Bin is really a very good boss, he not only put the interests of users first but also put the employees in mind, it is very happy to be his employees.
Endorsing NIO, is the reason why I bought NIO shares. Back in 2017, the company issued options.
In August 2019, I opened an account and by November when NIO stock dropped to over a dollar, I chose to buy it.
Although I had left NIO by then, for me, I was bullish on the company and the entire track, whether I was on board or not.
If I were to sum it up in one sentence, it was a constant investment target within my grasp and I was bullish that it would go up. Prior to this, I had never speculated in stocks.
There were all sorts of bad things said about NIO, and I even heard that "NIO will go out of business tomorrow or next year at the earliest".
But for me it was just the opposite. From an emotional point of view, I have seen NIO's product grow from nothing to almost 20,000 units, and I have both knowledge and confidence in the product.
Furthermore, I recognize William Li Bin , which is a core factor, confidence is always there, nothing more than waiting for it to come back to life is tougher.
It would be a lie to say there was no gamble at all, and I also bought Tesla at the time, but the NIO ratio was much higher.
Is this business really worth just over a dollar? No way, just because of product delivery or some other reason, I'm willing to try it with my own money.
From a rational point of view, I know that there is a logic and a playbook for the management team to do things.
We're confident we can make this work, whether it's on the manufacturing side of the product or on the customer side.
I know a lot of NIO owners well and they bought NIO stock after they purchased their cars.
Finally, from an investment standpoint, there was a lot of room for growth at that price.
I had a lot of friends who were neither NIO employees nor car owners, but we all agreed to buy at that point in time.
Now a year later, basically all of them have made back at least one car payment and everyone has bought an NIO car.
From over a dollar to now, NIO's current stock price is what it deserves, because deliveries have been going up. It turns out that working late every night at the company was really working overtime on faith.
Those of us who bought at a dollar more are also buying with faith.
People don't sell either, they just hold it for the long term unless something else is going on, and that is simply to support William Li Bin.
For me, the volatility from the surge over the past year has not been great, and the impressive thing was the meltdown in US stocks due to the epidemic.
After the meltdown, my parents kept urging me to liquidate my positions, as I was losing money almost every day, and at first the profits were gone, but later the capital could not be saved.
But I held on and didn't sell, and it turned out that everything would eventually pass.
I can't predict exactly how high NIO's share price will go, but I think as long as the share price can match its performance and gross margin, it's reasonable.
Certainly from an investor's perspective, I'd expect those metrics to keep growing.
But overall, I'm a pretty calm guy. I never thought I'd get rich overnight from this, but I think NIO stock is going to make the new generation of 90s and 95s rich.
"Someone flipped from $200,000 to $2 million"
I had been trading A shares for many years but had only been exposed to US stocks for a year and a half.
However, I followed NIO long ago when its stock once surged 100% in one day.
It was obvious to me that the company's stock price had a lot of potential.
Right now, I think the price target for NIO is $100, which corresponds to a market cap of around $100 billion.
There's a good chance that NIO stock will rise to that number, but until then, NIO will need time because the industry isn't mature enough yet.
If you think of NIO simply as a car-building company, benchmarked against the likes of BBA (Mercedes, BMW, Audi), it won't be able to support that valuation yet.
But if you think of it as a technology company, there's a lot of room for imagination.
Because of the current environment in which NIO is operating, there has been a push at the national level to develop new energy vehicles, and Tesla's rise is due to the support it has received from the government.
Among all US stocks, NIO is becoming more and more like Tesla in terms of volume. Tesla's influence will also bring some attention to NIO and other new car makers.
Many people will miss out on Tesla in favor of NIO (because NIO is affordable for everyone, and Tesla is too expensive for not everyone).
From that perspective, it's also highly likely that NIO stock will go to $100, even if its valuation may have been inflated.
In retrospect, NIO is already over ten times the stock, but more people realized five or six times. Because so many conditions have happened in the interim, there have been a few times when the market has moved dramatically and there has been more public noise. As a result, there are very few people who have actually been able to hold the position from start to finish.
It's a huge test of human nature and when you're in the middle of it, it's really hard to stay calm. Paying tuition is inevitable, some people from $200,000 to $2 million speculation, and finally paid it all back.
This year NIO's stock price has undergone a dramatic transformation since it received investment from the Hefei city government. Before that, a team of professionals sold NIO stock, not because the institutions were wrong, but because they were worried about the huge risk, and the trading systems of different institutions have different tolerances.
On the other hand, it is a test of human nature whether to sell NIO stock if it goes up by ten points or not. People are always more interested in holding on to the money they earn, because you can't predict whether tomorrow will be up or down, and you can't know which will come first, the unexpected or tomorrow.
For me, the stock that has benefited me the most is Tesla. For a long time, I didn't like to buy NIO stock because I like high-frequency trading and it's too expensive to trade.
I don't have many regrets on NIO as a stock, but I really wasn't focused enough. People who swim the market every day inevitably miss many good opportunities and more importantly how they can catch the next one.
It's enough to "have some of the cake."
When I first got into U.S. stocks last October, the two stocks I bought kept losing money. When U.S. stocks crashed in March of this year, all the experts were predicting further declines, but whether it would be a V-shaped reversal or a W-shaped development, no one could tell.
When NIO stock was trading at over $3, I started investing short term and my money wasn't overnight because I was worried that the crash wasn't over yet.
Until the end of June, I opened a position in NIO at a price of $7.5, and in $15 and $16, respectively, when the position was raised, has been held until now, almost earned more than 200,000 U.S. dollars (about 1.341 million yuan).
In one year, NIO from the "worst" new energy car companies, into a hot new car brand. The turning point was in April this year, Hefei announced the injection of 7 billion yuan, giving us a lot of confidence.
In June of this year, NIO issued 60 million American Depository Shares (ADSs) at $5.97, when Tencent added 1.68 million shares to its holdings. These two events brought NIO's stock back to life completely, and the fundamentals have changed qualitatively.
At the same time, NIO has been very competitive and has been delivering record numbers.
Optimistic estimates are that NIO could deliver 40,000-50,000 units this year, which is roughly the level of Tesla's 2015 sales. At the time, Tesla's stock price was hovering between $37-45.
By 2016, Tesla will have about 76,000 sales, a market cap of $50 billion, and a stock price between $45-55.
That's why JPMorgan Chase has a $40 price target on NIO.
In fact, when I started speculating last year, I bought Tesla, but between one buy and one sell, I lost $2,000 all of a sudden because of the fees, which scared me, and I've been with Tesla ever since.
I became aware of NIO because three of my family members had bought four NIO cars. I then started buying NIO stock and held on to it.
Early last year, NIO hit rock bottom due to a lot of woes such as cash flow problems and vehicle recalls.
But the worse it got, the more people bought NIO stock, at an average cost of only $2. My relatives bought nearly 100,000 shares, and the returns were huge.
On the other hand, if NIO hadn't been in any trouble, we wouldn't have had a chance to bottom out.
After a few positions, I have added to the "top of the mountain", but I think that if the long-term bullish on a company, the difference between a piece or two is not too big an impact.
On my introduction, several of my good friends bought NIO when the stock price was around $7, and so far we have all made money.
I remember that William Li Bin majored in sociology when he studied at Peking University, and he was really smart and understood the needs of users.
In the words of William Li Bin, the relationship has just begun when you buy a car from NIO. That's why 60% of NIO's orders come from repeat customers, and that's a very good thing.
NIO stock has actually gone from a low of $1.19 to more than ten times that now.
In the process, I've only stepped in some of it and not made all of it. But for a stock flipper, it's nice to have some of the cake and eat it.