Kaixin Auto (KXIN) stock soared 89% after talks for an EV business Unit. Is it a buy?

Summary

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  • Shares of Kaixin stock KXIN +89% soared on Friday, after high volume trading. This was a result of the company’s announcement of new car dealership plans to establish a new energy vehicle (EV) business unit.

 

  • “The corporate strategic move has been made in the context of the Chinese government’s steady support for accelerated development of EVs and the rapid growth of EV market in China,” Kaixin said in a statement. “As a NASDAQ listed company, Kaixin is committed to becoming another player in the EV business following Li Auto, Nio, and Xpeng.”

 

 

 

Shares of Kaixin stock KXIN +89% soared on Friday, after high volume trading. This was a result of the company’s announcement of new car dealership plans to establish a new energy vehicle (EV) business unit.

The company said that it has been in talks about a merger and acquisition with a number of candidates in the EV manufacturing industry. The volume spiked at 196 million shares compared to a usual stock volume of about 366,000 shares.

“The corporate strategic move has been made in the context of the Chinese government’s steady support for accelerated development of EVs and the rapid growth of EV market in China,” Kaixin said in a statement. “As a NASDAQ listed company, Kaixin is committed to becoming another player in the EV business following Li Auto, Nio, and Xpeng.”

About Kaixin Auto Holdings (KXIN)

 

The Chinese auto manufacturer was established in 2015 as a venture in to China’s used car financing market by its corporate parent Renren Inc. The company has received support from the rapid growth of the country’s used car market.

Kaixin has managed to transform from a tech-enabled financing platform into a nationwide dealer network that combines self-owned and affiliated dealers. It has 14 dealerships in 14 cities in China with a specific focus on Porsche, land Rover, Audi, BMW, and Mercedes-Benz.

 

What is going to happen next?

 

In the world of stock market trading traders love to invest in stock from a speculative perspective. Today, during the pre-market hours the stock has corrected – 11% and is now 2.76 at the time of writing. Before the announcement on Friday, the stock was traded for about $1.67 per share. However, at the beginning of July, the stock was above $2.

Disclaimer – I/we have no position in any stock mentioned. I wrote this article myself, and it expresses my personal opinions. I am not receiving any compensation for it, other than FDGT Academy. I do not have or had in the past any business relationship with any company that is mentioned in the above article.

Natalia C. - Junior Analyst at FDGT Academy

Natalia C. - Junior Analyst at FDGT Academy

I am a stock analyst/investor with prior experience and knowledge to BSc Accounting and Finance. After completing my degree and exposure to the accounting firms I decided that the direction I should choose is towards the Investment world. I completed my masters in Investment Management where it gave me solid fundamentals to build my career on. I have examined a lot of different aspects of investment, from REITS, derivatives, currencies, bonds, equity and hedge funds. I never stopped learning about the market which is why I can analyze and write articles for FDGT community always personally opinionated. My passion are green energy and electric vehicles stocks as a whole. I also had my share of analyzing the work form home stocks that are coming to take over in the upcoming years.

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