Shares of Nio (NYSE: NIO) were rocked by a short-seller report this morning, with an initial dive of 8%. But the company's response seems to have eased investors' minds, and shares bounced back some by midday. As of 12:45 p.m. ET on Wednesday, Nio stock was still down, but only by 3.4%. 

Nio responded with a sharp denial against the claims made by the Grizzly Research report. Grizzly, which admitted that it and its affiliates hold short positions in the stock, basically said that Nio is improperly booking revenue from its multiyear subscriptions for its battery swap service. That allows customers to spend less up front for a Nio vehicle, and with the subscription, they use battery swap stations to quickly replace drained batteries rather than recharging. 

Grizzly claims, among other things, that Nio has been booking the full seven years' worth of subscription revenue and transferring the burden of collecting the monthly payment to an affiliated company. But Nio hit back today, and helped ease investor concerns, at least for now. 

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Source Fool.com