Nikola Corporation Stock (NKLA): Should I Buy It Now?

By Amit Chowdhry ● June 9, 2020
  • Should you buy Nikola Corporation (NASDAQ: NKLA) now? Here is some information to help you decide.

Phoenix, Arizona-based hybrid truck design company Nikola Motor Company recently merged with VectoIQ Acquisition Corporation. The combined company was listed on the NASDAQ exchange as Nikola Corporation (NASDAQ: NKLA) in Q2 2020.

Ever since Nikola and VectoIQ announced the planned reverse merger on March 3, the shares are up as high as 612%. Nikola said that it has as much as $10 billion in potential revenue from the pre-orders. And revenue is expected to start being generated in 2021.

For the vehicles, Nikola is planning to build a network of hydrogen fuel refill stations. The refill stations are expected to have the ability to refuel as quickly as a tank with gasoline.

On Monday, shares of Nikola Corporation (NASDAQ:NKLA) (NASDAQ: VTIQ) had surged from $35.97 to $73.27 (up about 104%) after company founder and chairman Trevor Milton said that the company is now taking reservations for its new electric pickup truck later this month:

And here is a video presentation that Nikola published for its analyst day investor event on April 6, 2020:

Nikola initially focused on developing electric Class 8 heavy trucks, but now the company revealed that it now has an electric pickup called the Badger under development. The Badger will have a battery pack and hydrogen fuel cell — which will have 600 miles of range (300 miles on battery and 300 on hydrogen fuel cells). And the truck will have a blended mode that draws power from the fuel cell and battery pack or just batteries alone.

The Badger will utilize technologies developed for the company’s heavy trucks. And the company is planning to build the vehicle in its own factory starting next year. Nikola will be finding a partner to manufacture the Badger.

Nikola also develops a fully-electric four-seater OHV, a military-grade fully-electric tactical OHV, and a fully-electric sit-down personal watercraft that resembles a jet ski.

The Badger can go from 0-60 MPH in 2.9 seconds. And it has up to 980 foot-pounds of torque and 906 peak or 455 continuous horsepower.

“This is a significant endorsement in fuel-cell and battery-electric technology. Since Nikola launched its first fuel-cell semi-truck, you have seen the world rally behind hydrogen and follow our lead,” said Milton in a statement. “What was once considered the fuel of the future is now accepted as today’s solution. With our Nikola Iveco joint venture and over $10 billion in pre-order reservations, Nikola is positioned to be a wonderful story of how one company can literally change the world.”

As of Monday, June 8,  IVECO parent company CNH Industrial (IVECO) announced that it now holds 25,661,449 shares of Nikola Corporation, which corresponds to about 7.11% of Nikola outstanding share capital. CNH Industrial N.V. had invested $250 million in Nikola through IVECO so far and will be producing Nikola trucks through its European joint venture in Ulm, Germany.

Earlier this month, Mark Russell was promoted to CEO of the company. Russell was former COO of metals manufacturer Worthington Industries and served as President of Nikola since February 2019.

According to Forbes, Trevor Milton now has a net worth of about $8 billion as of today.

Nikola Corporation Stock Performance – (NASDAQ: NKLA) as of 06/09/2020 morning (before market open)

1 day: up about 103.70%

5 day: up about 115.6%

1 month: Up about 393.4%

6 month: Up about 611.4%

YTD: Up about 610%

1 year: Up about 624%

Max (since June 2018 IPO): Up about 664.8%

Should You Buy Nikola Corporation (NASDAQ: NKLA) Now?

There is not enough information from analysts to make recommendations about the stock yet. Personally, I believe that the company has gained a lot of traction and I will continue buying shares of the company at different price points. Currently, Nikola makes up about 0.38% of my portfolio. But you should make your own decision.

Disclosure: I own a small number of Nikola Corporation (NASDAQ: NKLA) shares. I wrote this article myself and I do not have any business relationship with any company whose stock I write about. I am not a financial advisor and all articles are my opinion. You should do your own due diligence and consider talking to a financial professional before investing.