A Nio executive has denied a rumor that the company will be acquired by BYD, after the fake information circulated widely on social media.
A Nio (NYSE: NIO) executive denied a rumor that the company will be acquired by BYD (HKG: 1211, OTCMKTS: BYDDY) after it was widely circulated.
“The company's recent situation is quite good, cash flow turned positive in the third quarter, gross profit improved further in October, earning an extra RMB 100 million, and Onvo (deliveries) will exceed 10,000 in December,” Nio's assistant vice president for branding and communications, Ma Lin, said on Weibo today.
He shared a screenshot of a WeChat chat showing him asking BYD's head of branding and PR, Li Yunfei, if the person who posted the rumor is a BYD employee.
If he is a BYD employee, he needs to issue a clarification and apologize, and if not, then Nio and BYD can call the police together, Ma told Li.
Li later also took to Weibo to say that the rumored information about BYD's investment partnership with Nio is seriously untrue.
Earlier today, the suspected BYD employee posted content in a WeChat status saying that BYD and Nio would set up a joint venture, with BYD taking 51 percent of the shares and Nio 49 percent.
The joint venture would acquire Nio for RMB 16.5 billion and Nio will remain independent in the future, the denied rumor claimed.
It's worth noting that similar rumors were already circulating on Weibo a few days ago, only they didn't attract much attention.
The previous rumors were mainly posted by several bloggers in a questionable tone, suggesting that the credibility of the rumors was low.
Today's rumor has gone viral, mainly because the screenshot shows that the person who posted it is suspected to be a BYD employee.
This highlights the challenges big companies face in managing their employees at a time when social media platforms are changing the way information is disseminated.
BYD's total number of employees now tops 900,000, the most of any of China's 5,300 A-share listed companies, Li said on September 13 on Weibo.
The number is 400,000 more than the second largest, Li said, attaching a screenshot showing BYD's workforce of 900,608 employees.
Nio reported third-quarter earnings on November 20, showing that free cash flow turned positive in the quarter.
It reported revenue below its guidance range in the third quarter, net loss was essentially flat from the second quarter and gross margin improved to 10.7 percent, according to the earnings report.
Nio management said on an earnings call that it is confident of doubling sales next year and aims to be profitable by 2026.
It also confirmed on November 20 that its third brand is officially named Firefly and that deliveries of the sub-brand's first model would begin in the first half of 2025.
Nio Q3 earnings call: Sales and profitability targets, new model plans, and more
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