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 trials
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.