Chinese electric-vehicle stocks are on fire. And the share-price volatility is something to behold. Li Auto and NIO —as well as XPeng —dipped into the red Friday after starting out much higher. It was an incredible reversal.
Li Auto stock (ticker: LI) broke $40 a share in early trading after reporting third-quarter numbers. Shares were up more than 28% at the peak. The stock then briefly dipped into the red and is now up 4.6% on the day in midday trading.
NIO shares (NIO), up about 10% at one point, are down 4.3%. XPeng (XPEV) is down 1.9%.
The trading volume, meanwhile, has been incredible. NIO has traded almost 260 million shares so far on Friday. There are about 1.1 billion shares outstanding. Li has traded more than 200 million shares. There are about 1.3 billion outstanding. The comparable numbers for XPeng are about 100 million and 900 million, respectively.
Tesla (TSLA), by comparison, has traded about 9 million shares, or roughly 1% of its total stock outstanding, so far on Friday.
Citron Research tweeted out that NIO stock should go back to $25. That might have helped catalyze the selloff.
Investors can’t be blamed for taking profits. And profit-taking is another potential reason for Friday’s reversal. Chinese EV shares are up a lot—and quickly. NIO, Li, and XPeng are up 112%, 127%, and 61% over the past month, respectively. The Dow Jones Industrial Average and S&P 500 are up 0.3% and 1.3%, respectively, over the same span.
But there really is no comparison for the way Chinese EV stocks have traded recently.
Write to Al Root at allen.root@dowjones.com
The Crazy Ride Up—and Down—of NIO, Li Auto, and XPeng Stock - Barron's
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