{"id":10557,"date":"2023-08-09T18:08:29","date_gmt":"2023-08-09T18:08:29","guid":{"rendered":"https:\/\/isafespend.com\/investing\/u-s-judge-greenlights-nio-investor-class-action-over-factory-claims\/"},"modified":"2023-08-09T18:08:30","modified_gmt":"2023-08-09T18:08:30","slug":"u-s-judge-greenlights-nio-investor-class-action-over-factory-claims","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=10557","title":{"rendered":"U.S. judge greenlights Nio investor class action over factory claims"},"content":{"rendered":"
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\u00a9 Reuters. Chinese electric vehicle start-up Nio Inc. company logo is on display on its initial public offering (IPO) day at the NYSE in New York, U.S., September 12, 2018. REUTERS\/Brendan McDermid<\/span>
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By Jody Godoy<\/p>\n

(Reuters) – Nio (NYSE:) Inc investors can proceed as a class in a lawsuit claiming the Chinese electric vehicle maker lied about building its own factory in Shanghai during its 2018 initial public offering, a U.S. judge has ruled.<\/p>\n

The lawsuit in federal court in New York seeks damages from Nio, its executives and underwriters for a decline in share price after the carmaker said in March 2019 that it had scrapped plans to build the new factory it had said was “under construction” during the IPO.<\/p>\n

U.S. District Judge Nicholas Garaufis issued an order late Tuesday certifying a class of all investors who bought Nio American Depositary Shares (ADS) in the September 2018 IPO, and a class of investors who purchased ADS between Oct. 8, 2018 and March 5, 2019.<\/p>\n

The defendants have denied the allegations. Their attorneys did not immediately reply to requests for comment.<\/p>\n

The ruling is one of the final hurdles for the investors before a trial in the case. Securities class actions rarely go to trial; those that are not dismissed typically result in settlements. The company may also ask the judge to rule in its favor without a trial.<\/p>\n

The investors anticipated the factory would give Nio its own manufacturing capacity and alleviate its reliance on a Chinese state-owned manufacturer some analysts viewed as “third tier.”<\/p>\n

But construction had never started, the lawsuit alleges, citing former employees and the lack of necessary construction permits.<\/p>\n

The investors also claimed Morgan Stanley <\/span><\/span> (NYSE:), Goldman Sachs (NYSE:) and several other underwriters failed to properly vet the company’s statements.<\/p>\n

When Nio disclosed the plant would not be built in March 2019, its ADS price dropped 30%, from around $10 to $7 per share, the investors said.<\/p>\n

Nio ADS were trading at around $13.50 per share on Wednesday, down about 3.9% from Tuesday’s closing price.The case is In re: NIO, Inc., Securities Litigation, U.S. District Court, Eastern District of New York, No. 19-cv-01424. <\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a9 Reuters. Chinese electric vehicle start-up Nio Inc. company logo is on display on its initial public offering (IPO) day at the NYSE in New York, U.S., September 12, 2018. REUTERS\/Brendan McDermid By Jody Godoy (Reuters) – Nio (NYSE:) Inc investors can proceed as a class in a lawsuit claiming the Chinese electric vehicle maker<\/p>\n","protected":false},"author":1,"featured_media":10558,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[32],"class_list":{"0":"post-10557","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing","8":"tag-featured"},"yoast_head":"\nU.S. judge greenlights Nio investor class action over factory claims | iSafeSpend<\/title>\n<meta name=\"description\" content=\"\u00a9 Reuters. 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