Zero-emission truck designer Nikola Corp. (NASDAQ: $NKLA) is well on the way to turning the stock into a true valley, as it peaked last summer, then collapsed and is now undergoing a true resurgence. The majority agreed earlier, this stock was going through a rough time, especially when former CEO Trevor Milton left after being accused of fraud and misleading investors. Electric and hydrogen are now real buzzwords and investors are very enthusiastic about the latest developments.
All Focus On General Motors
Meanwhile, the sky seems to have cleared up a bit and the company is experiencing exponential growth this week. The main reason is an upcoming General Motor (GM) partnership agreement that is under pressure. In addition, EV-SPAC deals have become a household name in 2020 and the pace of new deals being closed only seems to be accelerating without any delay. Nikola is also part of this, along with other major players such as Tesla, Nio and Fisker. GM has recently highlighted its own plans to build electric and autonomous cars and announced that it plans to increase spending to $27 billion through 2026. A good partner to do business with, regardless of GM’s reputation and market position.
Where it closed at around $26 last week, the stock is now worth more than $35. This could increase further if the manufacturing partnership between Nikola and GM for the electric pickup truck called Badger comes to a final agreement. If this happens soon, it will be very beneficial, given that the third-quarter data has been favorable to Nikola and GM announced its new investment in electric cars last week. It just needs to get over the allegations of the fraud case as quickly as possible and regain and maintain the confidence of shareholders and investors.
Good Figures, Just Lets Not Forget…
Nikola reported a net loss of $0.31 cents and an adjusted loss of $0.16 cents for the start-up of conceptual zero-emission vehicles (trucks). There are no figures from 2019 to compare against, despite this the company also reported $918 million in cash. The figures could increase in 2021 if the production of trucks powered by batteries and hydrogen fuel cells actually becomes more realistic. With the electric pick-up Badger, that step towards the company’s goal seems a lot closer as bridges are being built. Nikola has intellectual property that is attractive to other major players in the market, plus it has a first-mover advantage in heavy-duty fuel cells.
Some caution is advised, because it must be emphasized that Nikola and GM are only negotiating and nothing has been signed, until then nothing is certain and it is mainly a bubble of suggestions and speculation. In addition, it is interesting because the fraud case has still gotten to the company, despite the fact that Mark Russell has been appointed as the new CEO since June 2020.
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