Nikola Corporation

Stock: NKLA

Rating: Buy

Author: Waleed M. Tariq

Overview

  • Nikola Corp. came out publicly in June 2020 as a BEV and FCEV maker.
  • The stock peaked at $66 that month and since dropped. Under $10, $4 billion market cap.
  • “TRE BEV” is the company’s first commercial BEV. “TWO FCEV” will be added in 2024.

Bullish

  • Nikola’s future is bright
  • The EV market is growing.
  • The facility will build 2,400 cars by 2022. With future growth, the factory might make 50,000 trucks annually.

Bearish

  • Lordstown Motors is controversial with little obvious improvement and is likely to remain bearish.

SEC Allegations

  • The SEC fined Nikola $125 million in December for deceptive statements and misrepresentations.
  • The fine ends a year of investigative examinations. The company has since detached itself from its founders and stated it will seek compensation from Mr. Milton.

2022 deliverables

  • The company delivered 2 BEVs to Total Transportation Services Inc. on December 22 to improve investor trust.
  • The delivery was part of a wider arrangement that includes vehicle trialsĀ 

Can Nikola Deliver?

  • Nikola can benefit from 2050 carbon neutrality objective. By 2022, 2,400 automobiles will be produced. The factory might eventually build 50,000 trucks each year.

Lordstown Motors Corp. (RIDE)

  • The corporation had a tough year in 2021 when charges from Hindenburg Research caused its shares to plummet from $15 to $3.5 with a $730 million market valuation.

Liquidity Issues

  • The company raised $700 million after buying SPAC last year but has subsequently wasted $234 million.

Conclusion

  • Until RIDE has a functioning product and the resources to be financially sustainable, I’m bearish about the stock.