Market News

Baillie Gifford Shuffles the Deck on LI, NIO

Scottish investment firm Baillie Gifford & Co. performed an interesting trick with the Chinese electric vehicle market earlier today. It bought in heavy on Nio (NASDAQ:NIO) and liquidated Li Auto (NASDAQ:LI). The move gave Nio a hefty boost in Friday afternoon’s trading, but Li Auto is still up slightly despite the Scottish retreat in the Chinese EV market.

First, a look at the numbers. Baillie Gifford held $1.18 billion in Nio stock at the end of 2022’s fourth quarter, reports noted. That was actually a significant drop; the holdings were worth $1.53 billion just three months prior. In turn, Baillie Gifford increased its holdings in Nio by around 24 million shares. That brings Baillie Gifford’s total Nio ownership to about 97 million shares total.

Several interesting points emerged as a result of this move. First, Baillie Gifford’s complete exit from Li Auto came after it cut its position in Li back in the third quarter. Further, Baillie Gifford didn’t just buy in on Nio, either; it also boosted its position in Tesla (NASDAQ:TSLA) by around 18.5 million shares, a 196.43% increase. However, the investment firm also had to admit that it lost around $14 billion dollars focusing on Tesla and Shopify (NASDAQ:SHOP).

Baillie Gifford’s move, based on analyst consensus, is actually somewhat counterintuitive. Wall Street calls Li Auto a Strong Buy, though it also notes that the stock’s $27.78 average price target means it has just 9.59% upside potential. However, Nio, merely a Moderate Buy, offers a 31.28% upside potential. That’s thanks to its $16.62 average price target.


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