- This week, the stock price of Nikola Corporation (NASDAQ: NKLA) increased by more than 25%. There are a few reasons why.
This week, the stock price of Nikola Corporation (NASDAQ: NKLA) increased by more than 25%. There are a few reasons why:
GM Potentially Increasing Stake
Phil LeBeau of CNBC reported that investors should not be surprised if General Motors increases its stake in Nikola. Last month, it was revealed that GM would be taking an 11% stake in Nikola through a $2 billion partnership. GM would obtain the stake in exchange for offering designing, production, and manufacturing services for the Nikola Badger pickup truck.
But then Hindenburg Research wrote a scathing report questioning the integrity of Nikola founder Trevor Milton and Nikola’s actual technological accomplishments. The SEC and Department of Justice started investigating the case made by Hindenburg Research. And Milton ended up stepping down from the company shortly after the report was published and Steve Girsky took the chairman role.
It’s worth mentioning that the deal with GM has not officially closed yet and the talks are still ongoing.
Management Confirms Production Targets Achieved
In a separate CNBC report, it was announced that Nikola’s production timeline and factory plans are still on track. Girsky said that the board remains “very supportive” of the progress made by Nikola CEO Mark Russell and the team’s ability to achieve the previously announced production targets.
“We’re excited about the vision. The vision excited a lot of people. The job now is about execution,” said Girsky in a CNBC interview. “And that’s frankly what we’re doing here today. We’re level-setting the company. It’s about execution now on that vision.”
Disclosure: I have a small number of Nikola shares in my portfolio