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There could be an important update or two in store for Chinese electric vehicle (EV) maker Nio (NYSE:NIO). As InvestorPlace’s Eddie Pan explained, the automaker’s annual general meeting is coming up on Aug. 25. Will Nio make a definitive statement about the infamous Grizzly Research short report? That’s the billion-dollar question that will be answered soon. This, along with the outstanding results provided in Nio’s most recent monthly EV delivery update, indicate that NIO stock has the potential to move fast and far.

The bulls are definitely right because there’s an evident mismatch between Nio’s share price and the company’s results. That’s the type of opportunity that contrarian traders should take advantage of before it’s too late.

Granted, it’s emotionally difficult to be a long-leaning contrarian when there’s a harsh short report floating around on the Internet. Yet, hopefully, it won’t be too long before Nio issues a definitive response to put investors’ minds at ease.

What’s Happening with NIO Stock?

NIO stock hasn’t been a strong performer this year so far. The shares were valued at $33 at the start of 2022, but recently they barely held the $20 level.

It’s an unexpected and perhaps irrational turn of events, during a time when Nio is growing by leaps and bounds. Indeed, Nio’s July update ought to have sent the bears into hibernation for a long time.

Suffice it to say that Nio has come a long way since the automaker’s humble beginnings. By the end of July, the company managed to deliver a cumulative total of 227,949 vehicles.

Furthermore, Nio delivered 60,879 vehicles year-to-date, up 22% year over year (YOY), and 10,052 vehicles just in July, up 26.7% YOY. This begs the question: Are NIO stock traders asleep at the wheel? The share price doesn’t seem to reflect the company’s growth at all.

Nio Might Respond to the Grizzly Short Report Soon

During Nio’s Aug. 25 annual general meeting, the company’s shareholders will vote on a number of issues. Among them is whether Nio should convert some unissued Class B ordinary shares into Class A shares. Also under consideration is whether Nio should adopt “蔚來集團” (NIO Group) as the company’s dual foreign name.

Pan provides more details on what to expect from Nio’s upcoming meeting. Yet, there’s an 800-pound gorilla in the room: Grizzly Research’s short report. As Pan points out, the short report alleges that Nio “has been inflating its revenue and net income margins through its battery asset management provider, Wuhan Weineng.”

Nio has apparently formed an independent committee in order to investigate the allegations, but Nio’s investors would undoubtedly like to hear a direct, definitive response from the automaker. Could Aug. 25 be the day when Nio debunks the Grizzly attack?

There are no guarantees, but the annual meeting would provide Nio an opportunity to issue a powerful and timely statement. Or, maybe Nio won’t respond to the Grizzly short report on Aug. 25, but the company could still pick another day to do this, and hopefully soon.

What You Can Do Now

The bears will attack when NIO stock is down, but that’s not the best strategy. True contrarians know that the time to strike is during peak pessimism, especially when the hard data is positive.

Nio’s loyal bulls should stand by the company during this challenging time. Just maybe, the company will use its upcoming shareholder meeting as a chance to respond to Grizzly Research’s short report. Even if this doesn’t happen, though, Nio’s delivery results speak for themselves and should serve as an effective bear repellent.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.