Li Auto (NASDAQ: LI) stock is experiencing a 7% decline today following the company’s adjusted delivery expectations for the first quarter. Li Auto now anticipates delivering 76,000 to 78,000 vehicles, compared to the initial projection of 100,000 to 103,000 vehicles. This downward revision, representing a 24% decrease at the midpoints, is attributed to underwhelming orders and operational missteps related to the newly debuted MEGA EV, with its premier Max trim starting at $77,700 – the highest-priced offering from Li.
CEO and Chairman Xiang Li acknowledged the error in planning for the Li MEGA model’s scaling phase, mistaking it for the preliminary business validation period. He emphasized the need for a meticulous validation process for both Li MEGA and BEV technologies, akin to the journey undertaken by Li ONE and EREV technologies. Xiang Li outlined the company’s strategy to prioritize high purchasing power regions for MEGA sales before transitioning to broader markets. Furthermore, he conceded that Li’s emphasis on deliveries overshadowed customer satisfaction, indicating a shift towards a more balanced approach.
Overview of Institutional Ownership Trends
Monitoring institutional investment in LI stock is paramount as these entities play a crucial role in providing liquidity and stability to the market. During Q4, 241 13F filers revealed their positions in LI, marking a marginal upswing of 21 filers from the prior quarter. Cumulatively, these filers hold 99.21 million shares, a modest 0.24% decline from the preceding quarter.
Hedge funds, a subset of institutional investors, exhibited a slightly bearish inclination towards LI stock. 62 hedge funds disclosed their stakes in LI, mirroring the previous quarter’s figure. However, the total hedge fund ownership decreased by 4.25% to 40.82 million shares.
Exploring the identities of the five prominent buyers of LI stock during Q4 sheds light on investor sentiment and market dynamics:
- D.E. Shaw & Co. augmented its position by 1.86 million shares, elevating its holdings to 4.81 million shares.
- Morgan Stanley (NYSE: MS) acquired 1.79 million shares, expanding its stake to 5.32 million shares.
- The Canada Pension Plan Investment Board bought 1.70 million shares, initiating its ownership of LI stock during the fourth quarter.
- FMR increased its stake by 1.39 million shares, reaching a total of 10.74 million shares in holdings.
- Susquehanna obtained 1.37 million shares, boosting its stake to 2.46 million shares.
At the time of writing, Eddie Pan does not maintain any positions (directly or indirectly) in the securities mentioned in this article. The views expressed in this piece are those of the author and abide by the guidelines set forth by InvestorPlace.com.
