- General
- September 19, 2020
- 5 minutes read
Bridgewater Buys Into Nio
Bridgewater Co-CIO Ray Dalio. Photo by David Fitzgerald /Sportsfile, licensed under Creative Commons Bridgewater Associates, the world’s biggest hedge…
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| Bridgewater Co-CIO Ray Dalio.
Photo by David Fitzgerald /Sportsfile, licensed under Creative Commons
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Bridgewater Associates, the world’s biggest hedge fund, has made a relatively small investment in NIO, the Chinese electric carmaker. Recent filings with the U.S. Securities and Exchanges Commission (SEC) indicate that Bridgewater holds 856,026 NIO American depositary shares worth over $16 million at NIO’s current (as of writing) share price. According to an SEC filing dated last month, Bridgewater held the same number of shares in NIO but at the time worth roughly $6.6 million. NIO has recently soared on the heels of a $1.5 billion secondary fundraise by the company, clinching a profit of more than $10 million for Bridgewater in the process. Although that profit figure seems bountiful, it pales in comparison to Bridgewater as a whole, being a hedge fund with well over $100 billion in assets under management.
Bridgewater isn’t exactly new to the electric vehicle industry, having previously bought a sizeable stake in Tesla, the biggest of any electric car company by market capitalization. Overall, Bridgewater regularly trades stakes in numerous publicly-traded companies and has this time apparently seen NIO as a trustworthy bet and with a $10 million+ profit to encourage such perception. NIO as an automaker is facing intense competition in the Chinese market from counterparts such as Tesla, Xpeng, and BYD. It’s such that NIO lost $166 million on sales of $493 million in the second quarter of this year. However, the company’s business seems to be growing at a strong rate, with over 10,000 car sales in the second quarter of this year compared to about 3,500 in the same quarter last year. In its most recent quarter, NIO posted its highest number of quarterly sales yet, marking a catalyst to the company’s recent stock rise.
NIO, which was founded only in 2014, has produced three electric car models so far; the ES8, ES6, and EC6, all SUVs. The most recent, the EC6, began delivering to customers this year. Investors so far seem optimistic for NIO’s future as a carmaker, with billions of dollars in funding for the company to back such sentiment. Among such investors appears to be Bridgewater, one of the world’s major hedge funds, from whom an investment could be a signal of interest to other similar funds.
