: XPeng stock rockets to record rally as bulls brush off bad results, outlook


The U.S.-listed shares of China-based electric vehicle maker XPeng Inc. skyrocketed Wednesday, as investors cheered changes in China’s COVID policy while shrugging off weak third-quarter results and a downbeat outlook.

The stock

charged up 47.3% to $10.81, enough to pace all gainers on the New York Stock Exchange. That was also the biggest one-day gain since the company went public in August 2020, surpassing the previous record advance of 33.9% on Nov. 23, 2020.

The rally comes even after XPeng reported a wider-than-expected loss for the third-straight quarter, missed on revenue for the first time and said it expected fourth-quarter revenue to fall 40% to 44% from a year ago while the FactSet consensus called for just a 4.4 decline.

Instead, investors seemed China appeared to move toward easing its zero-COVID policy, amid growing social unrest and a slowing economy. China’s government said Tuesday that it would renew its push to vaccinate the elderly, and said it would amend COVID control measures.

XPeng’s stock rally also comes at a time when investor sentiment had soured. Earlier this week, Jefferies analyst Johnson Wan downgraded the EV maker, citing recent “missteps” by the company at a time that the “honeymoon stage” for EVs in China was coming to an end.

In addition, short interest, or bearish bets on XPeng’s stock, was 5.7% of the public float, or freely tradable shares, based on the latest available exchange data. That compares with short interest as a percent of float for China-based rivals Nio Inc.

at 4.1% and Li Auto Inc.

at 4.7%.

For Tesla Inc.
which generated $5.13 billion in revenue from China in its latest quarter, or about 24% of total revenue, short interest as a percent of float was 2.9%.

XPeng’s stock soared 63.3% in November but has still tumbled 37.6% over the past three months. In comparison, the Invesco Golden Dragon China exchange-traded fund

has shed 10.9% the past three months while the S&P 500 index

has gained 2.9%.

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