XPEV Stock Price Falls 20.63% This Past Week: Why It Happened

By Amit Chowdhry ● Dec 4, 2020
  • The stock price of Xpeng Inc (NYSE: XPEV) has fallen 20.63% this week as it went from $65.29 on November 27 morning to $51.82 at the close on Thursday, December 3. This is why it happened.

The stock price of Xpeng Inc (NYSE: XPEV) has fallen 20.63% this week as it went from $65.29 on November 27 morning to $51.82 now. There are several reasons why the stock price of Xpeng fell.

Negative Stock Price Trigger: UBS Downgrade

Earlier this week, UBS analyst Paul Gong downgraded Xpeng shares citing that it ran up too fast. Gong had downgraded the stock from “Buy” to “Neutral.” However, Gong increased the price target from $25 to $59.

“But after an over-200% rally, we believe investors more or less already recognize this,” said Gong in a research report via MarketWatch. “Despite raising our volume forecasts on an increasingly positive long-term view (and reducing loss-per-share estimates), we view its potential upside/downside as largely balanced.”

Negative Stock Price Trigger: U.S. House Passes Holding Foreign Companies Accountable Act 

On Wednesday, the U.S. House of Representatives passed a bill for more regulation to be added to China-based companies that have securities listed on U.S. exchanges. This could be quickly signed into law since the Senate approved of it in May. The measure would enable the Public Company Accounting Oversight Board (PCAOB) to oversee the auditing of the financials of China-based companies.

This also affected the stock prices of Nio and Li Auto in the Chinese EV space along with other Chinese companies like Alibaba, Baidu, and Pinduoduo. Some analysts pointed out that this should not have a major impact on the company as they could work with U.S. auditors for their financials in order to comply with the PCAOB.

Disclosure: I have a small position of XPEV in my stock portfolio.