XPeng (NYSE: XPENG) (HK: XPENG-W) shares are up some 10% as Vathy Woods' ARK Invest unloads the bulk of it position in XPENG stock. This isn't, as we might note, the very best time investment decision of all times. But then it's possible to view ARK Invest as an organisation that rode the surging technology wave very well but which also isn't all that good at the more detailed parts of investing life - like timing. Not that we'd be so cynical as to insist that this is our own considered view but there has been a glorious amount of value destruction as the wave receded from the shore. Knowing when to get out of a cyclical surge is just as important as knowing when to get in after all.
As to why XPeng has surged no, we do not think that ARK selling out is what prompted the rise. No one is - as yet - that convinced of ARK's ability as a contrarian signal to always assume on buying when they sell, selling when they buy. Rather, there's just been a general surge in electric vehicle makers, especially the Chinese ones, over the past couple of days. All of which is driven by sentiment. There's been no grand new announcement by anyone but NIO, XPeng, Rivian all rose strongly. Sentiment might not be quite the right word, say a change in opinion. We're waiting for the Tesla report on sales, the US signed a critical minerals deal with Japan. These are likely not the reason for the surge, markets have a tendency to attach stories to events rather than the events necessarily driving the story and prices.
XPeng share price from Hong Kong Stock Exchange
Markets in new technology stocks just do tend to work in this manner. We're all aware that the vast majority of companies pushing the new techs are going to go nowhere. The US had hundreds and hundreds of car companies a century and more back, only three of any size were left standing in the end. Much the same happened with dotcom madness - most went bust but a few real pearls survived.
Given that we don't know who is going to survive all of the share prices tend to move in unison on news or even just changes in beliefs about the sector.
