Why Nio Stock Crashed Early Monday

Shares of Nio (NYSE: NIO) crashed at the open Monday morning, as investors are fleeing many Chinese names, including this electric vehicle (EV) maker. The company's American depositary shares pared some of the initial 14% drop, but remained down by 2.6% as of 10:25 a.m. ET. 

Nio shares are getting hit from several different angles. First, investors are running from many Chinese stocks right now, fearing the potential delisting from U.S. exchanges. That possibility comes from the Holding Foreign Companies Accountable Act (HFCAA), which became law in December 2020. It came into focus for investors last week after the Securities and Exchange Commission (SEC) identified five U.S.-listed American depositary receipts of Chinese companies that failed to comply with the regulation. 

Image source: Nio.

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Source Fool.com