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1/ Thread on my latest article for @gurufocus in which I attempt to answer the question, "Can Nikola Motors Survive Without a Partner?"
Read on or click the link below to find out. $NKLA $GM
https://www.gurufocus.com/news/1261251/can-nikola-motors-survive-without-a-partner/?r=4bf001661e6fdd88d0cd7a5659ff9748&mod=mw_quote_news
Read on or click the link below to find out. $NKLA $GM
https://www.gurufocus.com/news/1261251/can-nikola-motors-survive-without-a-partner/?r=4bf001661e6fdd88d0cd7a5659ff9748&mod=mw_quote_news
2/ Despite having cooled in the weeks following its IPO, $NKLA/s stock remained a hot investor topic throughout the summer. The 9/8 announcement of a manufacturing partnership with $GM reinvigorated market attention.
Then everything went off the rails. https://www.cnn.com/2020/09/08/business/nikola-gm-badger-electric-vehicles/index.html
Then everything went off the rails. https://www.cnn.com/2020/09/08/business/nikola-gm-badger-electric-vehicles/index.html
3/ Let's start with the demo crisis:
On 9/10 @HindenburgRes released a bombshell report alleging that $NKLA faked a 2018 demo of Nikola One, a supposedly working prototype fuel cell truck. According to the report, the semi was anything but functional. https://hindenburgresearch.com/nikola/
On 9/10 @HindenburgRes released a bombshell report alleging that $NKLA faked a 2018 demo of Nikola One, a supposedly working prototype fuel cell truck. According to the report, the semi was anything but functional. https://hindenburgresearch.com/nikola/
4/ $NKLA fought back immediately, but its attempts to counter or discredit Hindenburg’s report largely fell flat. On 9/17, it finally owned up to faking the demo. Unsurprisingly, the stock took a beating in response. https://www.extremetech.com/extreme/315151-electric-vehicle-company-admits-it-faked-fuel-cell-semi-truck-demo
5/ Let's turn to leadership:
From the outset, Trevor Milton went all in on the classic @elonmusk playbook. Much like Musk, Milton leveraged Twitter, to promote $NKLA's brand and establish himself as it's leading (and indispensable) man.
$TSLA $TSLAQ
https://www.gurufocus.com/news/1166700
From the outset, Trevor Milton went all in on the classic @elonmusk playbook. Much like Musk, Milton leveraged Twitter, to promote $NKLA's brand and establish himself as it's leading (and indispensable) man.
$TSLA $TSLAQ
https://www.gurufocus.com/news/1166700
6/ While the media spotlight can be a powerful tool, it can also leave you exposed. Milton initially denied @HindenburgRes's accusation, calling it a spurious attack by short-sellers and promising a robust defense of $NKLA and the Nikola One demo. https://www.teslarati.com/nikola-trevor-milton-response-hindenburg-report/
7/ As the evidence of the faked demo mounted, Milton’s position became untenable. He resigned on Sep. 21 and was replaced by Mark Russell. The change in leadership is not much of a shakeup, however. $NKLA https://www.nytimes.com/2020/09/21/business/nikola-trevor-milton-resigns.html
8/ Mark Russell joined $NKLA in early 2019. Thus, while he wasn't there during Demogate, he is deeply embedded in the corrupt ecosystem. Like @Boeing replacing its corrupt CEO w/ its own board chair who had been asleep at the wheel for years. $BA $BA.D https://nikolamotor.com/press_releases/mark-russell-named-nikola-president-57
9/ Now let's look at the @GM partnership:
$GM agreed to provide “batteries, a chassis architecture, fuel cell systems and a factory to build the startup’s proposed Nikola Badger pickup in exchange for 11% ownership in $NKLA. https://www.reuters.com/article/us-gm-nikola-investment-idUSKBN25Z1UL
$GM agreed to provide “batteries, a chassis architecture, fuel cell systems and a factory to build the startup’s proposed Nikola Badger pickup in exchange for 11% ownership in $NKLA. https://www.reuters.com/article/us-gm-nikola-investment-idUSKBN25Z1UL
10/ Boiled down, the deal would make $GM responsible for virtually all operational, technological, engineering & manufacturing activities. $NKLA, meanwhile, would be responsible for little more than concept renders and PR pizazz. What a deal! https://media.gm.com/media/us/en/gm/home.detail.html/content/Pages/news/us/en/2020/sep/0908-gen2fcs.html
11/ While @HindenburgRes's expose´ concerned the Nikola One, not the Badger, it shattered $NKLA's reputation, throwing the deal into serious doubt. On 9/29, reports circulated that $GM had delayed signing the agreement and was pushing to renegotiate terms. https://www.freep.com/story/money/cars/general-motors/2020/09/29/gm-nikola-contract-renegotiates/3522042001/
12/ With a deal deadline set for 12/3, $NKLA has precious little time to come to new partnership terms with $GM, while its battered reputation and shrunken share price have likely weakened its negotiating hand. Not a great look for the company! https://www.fool.com/investing/2020/10/02/nikola-and-gm-reportedly-renegotiating-partnership/
13/ All right, time for final thoughts:
Building auto manufacturing infrastructure takes time & costs a lot (just ask $TSLA). $GM had been more than willing to provide these crucial functions to $NKLA at a remarkably generous price. That's now in doubt.
https://www.gurufocus.com/news/1261251/can-nikola-motors-survive-without-a-partner
Building auto manufacturing infrastructure takes time & costs a lot (just ask $TSLA). $GM had been more than willing to provide these crucial functions to $NKLA at a remarkably generous price. That's now in doubt.
https://www.gurufocus.com/news/1261251/can-nikola-motors-survive-without-a-partner
14/ While newly minted CEO Mark Russell has attempted to show strength, claiming that $NKLA can go it alone without $GM, few industry analysts believe such a course is possible. It's a lesson others have learned the hard way (*cough* $TSLA *cough* $TSLAQ) https://twitter.com/Tweetermeyer/status/1235706900810854400
15/ To sum up, $NKLA desperately needs a manufacturing partner with a track record in the auto industry. $GM remains its best hope, but it will likely cost a lot more than initially anticipated.
Full article:
https://www.gurufocus.com/news/1261251
Full article:
https://www.gurufocus.com/news/1261251
