Nikola Stock Falls as General Motors Deal Comes Into Question
Following a statement in which Nikola Corp.’s CEO said the company will still be able to proceed with its plans if the technology sharing and manufacturing deal with General Motors falls through, share prices fell as much as 16% by end of trading on Friday — reports Bloomberg Green.
Nikola CEO says the startup’s plans are intact even if GM deal unravels https://t.co/zmSSOmwzGu
— Bloomberg Green (@climate) October 16, 2020
And this is on top of the more than 70% fall in Nikola Corp’s share prices have already seen from a $79.73 high back in June.
Early last month, Nikola Corp. announced a tentative partnership with General Motors in which the latter would share its fuel-cell technology with the former and manufacturer Nikola Corp.’s electric pickup, the Badger. In exchange, GM would get an 11% stake in Nikola.
The contract was supposed to be signed on September 30, but has since been postponed. Representatives from both companies have stated that negotiations are still ongoing — the two entities have until December 3 to come to an agreement.
Nikola’s previous CEO Trevor Milton surprised investors when he resigned from the company last month. Many have doubted Milton’s claims, especially after it was revealed the company’s hydrogen truck prototype was just rolling down a hill and not driving on its own.
If the deal with General Motors ends up falling apart, Nikola will revert to a “base plan” that doesn’t involve GM, said CEO Mark Russell. Russell also went on to say that the company is fully prepared to scrap its plans for the Badger if it cannot partner with an Original Equipment Manufacturer like GM.
In that event, the company would divert its resources to other projects like its two heavy truck prototypes that use fuel-cells from Robert Bosch GmbH, its battery-electric semi truck slated to go into production next year in Germany, or the fuel-cell-powered big rig the company intends to manufacture at its currently under-construction factory in Coolidge, Arizona.