Nikola dives 15% after CEO offers murky commentary on GM deal ahead of December 3 deadline


  • Nikola tumbled as much as 15% in early Wednesday trading after the company’s CEO failed to soothe investor concerns around its $2 billion partnership with General Motors.
  • Chief executive Mark Russell said on CNBC that talks with GM are ongoing. The companies have until December 3 to reach an agreement before either party can leave the partnership.
  • Russell also stopped short of guaranteeing that founder and former chairman Trevor Milton won’t dump his Nikola shares once his lock-up period ends on December 1.
  • Milton holds nearly 86 million shares, making any selling plan a sizable risk for Nikola bulls.
  • Watch Nikola trade live here.

Nikola shares tanked as much as 15% in early Wednesday trading after the automaker’s CEO offered mixed messaging on whether a deal with General Motors will materialize by a key December deadline.

Chief executive Mark Russell said talks with GM are ongoing, particularly on fuel cell supply and production of Nikola’s Badger pickup truck. The CEO stopped short of guaranteeing a deal will go through, leading investors to fear the $2 billion partnership could miss expectations.

Nikola and GM have until December 3 to reach an agreement. If a deal isn’t finalized, either party can exit the partnership.

“We continue to talk to them about those things,” Russell said on CNBC.

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The CEO also failed to reassure shareholders that Nikola founder Trevor Milton, who stepped down as chairman in September, would not dump his shares next month. The lock-up period for the company’s early investors ends on December 1, allowing Milton to sell his nearly 86 million shares as he pleases.

The sum accounts for roughly 24% of Nikola’s shares outstanding, making any stock sale from Milton a risk to Nikola bulls.

Speculation around the GM deal has fueled outsized volatility for Nikola shares in recent trading sessions. The electric-truck company surged as much as 29% on Tuesday after GM announced it’s no longer backing the Trump administration’s efforts to block California’s stricter emissions standards. The state regulations are poised to lift the electric-vehicle industry as California works toward phasing out gasoline-powered vehicles.

“We are confident that the Biden Administration, California, and the U.S. auto industry, which supports 10.3 million jobs, can collaboratively find the pathway that will deliver an all-electric future,” GM CEO Mary Barra said, according to The Wall Street Journal.

Nikola closed at $34.50 on Tuesday. The company has three “buy” ratings, six “hold” ratings, and one “sell” rating from analysts.

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