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Wednesday's Premarket Movers: China's EV Makers (NIO) (LI) (XPEV), Paycom (PAYC) Plummets, WeWork (WE) Isn't Working, Bitcoin Runs

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From Chinese EV makers to Bitcoin, here are some of Wednesday’s big movers in the premarket session.

Nio, Li Auto, Xpeng report deliveries

Chinese EV makers Nio Inc. (NYSE: NIO), Li Auto Inc. (NASDAQ: LI), and Xpeng Inc. (NYSE: XPEV) all reported October deliveries this morning. Combined, the three automakers delivered 76,498 deliveries for the month, a year-over-year increase of 14.5%.

In October, Nio delivered 16,074 units, up about 4% month over month and 59.8% year over year. Deliveries for the first 10 months of 2023 now total 71,506. Nio has sold more than 400,000 vehicles since June 2018.

Li Auto delivered a record 40,422 EVs in October, up 302.1% year over year and a new monthly delivery record. Sales rose 12.9% month over month. Li Auto has delivered almost 285,000 vehicles so far in 2023.

Xpeng reported deliveries of 20,002 vehicles in October, up 292% year over year and up 31% month over month. October deliveries set a new monthly record. That total is roughly half the deliveries the company reported for the entire third quarter.

Paycom plummets

After U.S. markets closed Wednesday, Paycom Software Inc. (NYSE: PAYC) reported third-quarter results. Earnings per share came in above the consensus estimate, but revenue was 1.2% below the consensus estimate and 21.6% above the year-ago total.

The really bad news was Paycom’s guidance. The company lowered fourth-quarter revenue guidance to a range of $420 to $425 million. The consensus estimate had called for revenue of $452.3 million for the quarter. The company provides human resources management software for small and mid-size businesses.

Does the punishment fit the crime? Shares plunged more than 35% in after-hours trading Tuesday and traded down nearly 38% in Wednesday’s premarket session at around $152.50 in a 52-week range of $236.87 to $374.04.

WeWork to file for Chapter 11 protection

Office space rental company WeWork Inc. (NYSE: WE) is reportedly planning to file for bankruptcy protection as early as next week. The Wall Street Journal cited unnamed sources who are “familiar with the matter.”

WeWork has posted a share price drop of ‌around 98% over the past 12 months, and shares traded at around $1.50 in Wednesday’s premarket.

Once valued at some $47 billion, by the time the company held its IPO, the valuation had fallen to $9 billion. The market cap was about $120.3 million at Tuesday’s closing bell. The collapse in commercial rentals provides increased competition from other building owners looking for any way to salvage some cash flow from their empty buildings. Operating cash flow is negative, and negative free cash flow for the past four quarters totals just over $1 billion. The company reported $205 million in cash and equivalents in August.

The immediate issue is a missed interest payment that was due October 2. A one-month grace period ends Thursday, and WeWork has convinced its bondholders to give it an additional seven days to convince key stakeholders that the company has a plan “to implement our ongoing strategic efforts to enhance our capital structure.”

Bitcoin boogie

Since mid-September, the BTCUSD exchange rate has risen from about $25,100 to a recent high of almost $35,100. It’s always been difficult to tease out reasons for Bitcoin’s price movements, and there’s really nothing different this time around.

The industry is still waiting and hoping for the Securities and Exchange Commission to approve spot Bitcoin ETFs that will hold actual Bitcoin and trade just like any other ETF. Well, almost any other ETF.

In the event, spot bitcoin will likely follow the spot gold ETFs that some people believe transformed the market for gold. According to the World Gold Council, however, gold-backed ETFs and other assets totaled $202.7 billion in 2022. According to a report in the Financial Times, the global cryptocurrency market cap has fallen from $3 trillion in 2021 to about $1.3 trillion. If Bitcoin ETFs are going to save crypto, they’re going to do it very slowly.

In its latest quarterly Gold Demand Trends report, the World Gold Council noted, “Gold ETFs saw continued outflows in Q3, largely driven by investor sentiment that interest rates will continue to stay high.” Outflows totaled 139.3 metric tons in the third quarter, up from outflows of 21.1 metric tons in the second quarter.

No less a luminary than Mohamed El-Erian, chief economic advisor to Germany’s Allianz, is pumping Bitcoin as a store of value. El-Erian told CNBC on Tuesday:

You have people talking about bitcoins, about equity, being the ‘safe asset’  because they’ve lost confidence in government bonds being the safe asset because of the nature of the interest rate risk.

Talking about 10-year Treasuries, he noted, “We haven’t seen the flight to quality [or] flight to safety that you would expect given what’s happening in the world.”

So, gold ETFs aren’t attractive and U.S. Treasury notes aren’t attractive, leaving only Bitcoin as a safe haven. O brave new world.

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