|Bid||45.20 x 800|
|Ask||45.22 x 1000|
|Day's Range||44.75 - 45.58|
|52 Week Range||14.33 - 46.71|
|Beta (5Y Monthly)||1.35|
|PE Ratio (TTM)||20.19|
|Earnings Date||Feb 10, 2021|
|Forward Dividend & Yield||N/A (N/A)|
|Ex-Dividend Date||Mar 05, 2020|
|1y Target Est||47.47|
(Bloomberg) -- The sharp swings in Nikola Corp.’s stock may get more intense in the coming week as the company approaches two milestones -- the expiration of a share lockup and the deadline for completing an anticipated pact with General Motors Co.Shares of the developer of electric trucks and hydrogen fuel technology have see-sawed more than 10% in four out of the past six trading sessions. Recent gains have been propelled by the prospect electric cars will dominate the auto sector in the future and by industry leader Tesla Inc.’s impending entry into the S&P 500 Index. But on the downside, scant details on the future of partnership talks with GM have weighed on the stock.Selling restrictions on certain Nikola insiders and investors will end on Nov. 30, freeing up a big chunk of its float for public trading. Shares in the company have gained about 40% since it went public on June 4 through a reverse merger with the special purpose acquisition company VectoIQ.Nikola currently has a free float of about 171 million shares and Deutsche Bank analyst Emmanuel Rosner estimated that about 130 million in additional shares will get unlocked on Monday. JPMorgan analyst Paul Coster estimates an even higher amount of 161 million shares will be free to trade.This could put “large technical selling pressure on the shares after Dec. 1,” Rosner said in a research note on Nov. 10.Nikola shares were up as much as 4% in New York on Friday.One question for investors is whether Nikola’s founder and former chairman Trevor Milton -- the company’s biggest shareholder -- along with current Chief Executive Officer Mark Russell, will keep or sell their shares. Milton stated in an Aug. 26 tweet that he had no plans to sell his stock, with a current market value of $2.8 billion, other than to gift $233 million to employees as a reward for loyalty.At the time, Milton said he had approval from Nikola’s board to borrow against his stake to add to his position. Meanwhile, Russell’s stake in the company is valued at about $780 million, including options, according to Bloomberg calculations. He owns the shares directly and through an entity called T&M Residual, which Russell and Milton jointly own.GM PactScant details on talks with GM on a potential partnership scheduled to close on Dec. 3 is also casting a pall on the stock.Nikola’s shares jumped in September after an announcement that GM was slated to take a $2 billion equity stake in the startup and also help it manufacture its new electric pickup called Badger.The strong momentum didn’t last long. Nikola’s shares took a hit later that month after a short seller accused the company of “deception” and lying about its technology. The report helped trigger a chain of events that culminated with Milton’s departure on Sept. 21 and the launching of investigations by U.S. authorities.Russell assured investors on an interview with CNBC on Tuesday that discussions with GM on supplying fuel cells are still ongoing, though he declined to comment further.Read more: Nikola Falls as CEO Says Fuel Cells Talks with GM Are ‘Ongoing’Daniel Ives, an analyst at Wedbush Securities said the consensus view now is that the companies will ink a revised deal, which could result in GM taking a bigger stake in Nikola. JPMorgan analyst Paul Coster wrote this week that the company may want to drop the Badger partnership while GM may want more stock to compensate for the diminished scope.“Obviously the near-term risk for Nikola shareholders is elevated, but so too is the potential reward payoff,” Coster said.(Updates share move in sixth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
In this article we’ll run through the Top 10 Stocks Warren Buffett Just Bought. If you’re in a hurry to see the hedge fund legend’s highest conviction new stock purchases, you can jump straight to the Top 5 Stocks Warren Buffett Just Bought. Warren Buffett’s Berkshire Hathaway Inc (NYSE: BRK.A) has been one of the most […]
(Bloomberg Opinion) -- The chief executive officer of Volkswagen AG, Herbert Diess, has predicted that within five to 10 years the world’s most valuable company will be a carmaker. Given how much investors have been bidding up the shares of Tesla Inc. and other electric vehicle stocks, it might happen sooner.Tesla’s market value soared past $540 billion this week — equivalent to 250 times its expected earnings this year — meaning it’s now the world’s 10th-most valuable listed business, according to Bloomberg data. A trio of New York-listed Chinese electric-vehicle groups — Nio Inc., XPeng Inc. and Li Auto Inc. — are worth a combined $154 billion. None of the three is profitable and together they delivered fewer than 30,000 vehicles during the most recent quarter, just over 1% of Volkswagen’s car sales volumes.Arrival Ltd., a U.K.-based electric-bus and van startup that’s poised to go public by merging with a special purpose acquisition company, is valued at almost $16 billion after the SPAC’s shares more than doubled in a week. It won’t start producing vehicles until late next year.(1)The electric revolution is real and the shift away from combustion engines is accelerating. From a climate perspective, it’s great that investors are allocating capital like this. Still, valuations look mighty bubbly. The potential for disappointment is massive, particularly for the newest crop of EV makers that are yet to generate meaningful revenue.Like all financial bubbles, this one is driven by dreams of enormous wealth. Elon Musk has overtaken Bill Gates as the world’s second-richest person. Scottish investment manager Baillie Gifford & Co., an early Musk backer, recently cashed out billions of dollars in Tesla stock but retains a 3.7% holding worth about $20 billion. Baillie Gifford has more than one horse in the EV race: Its Nio stake is worth almost $6 billion. The Chinese company’s U.S-listed shares have surged 1,235% this year. Nio’s recent history shows the perils of electric-vehicle stocks. It warned in March of substantial doubt in its ability to continue as a going concern, having burned through $4 billion of cash in three years. It survived thanks to a local government bailout. Tesla has been on the cusp of bankruptcy at least twice since 2003. Those now joining the electric race claim to have learned lessons from these near-death struggles but there’s little to suggest their fates will be any less volatile.Competition is intense and while electric motors are simpler to build than combustion engines, developing a vehicle that’s safe, reliable and exciting is incredibly difficult. Incumbent giants such as Volkswagen and General Motors Co. are much better capitalized and they’ve far more experience managing supply chains and building brands. After a slow start, they’ve gone “all-in” on EVs. They won’t be shoved aside easily. Several factors have driven electric-vehicle stocks to these giddy heights. The U.S. Federal Reserve has stoked a speculative frenzy by cutting interest rates to zero, and bored millennials trading stocks at home on Robinhood have caught the EV bug. Electric-vehicle companies know how to market themselves to this crowd: Workhorse Group Inc. says its delivery vans can be paired with a drone, while XPeng emphasizes its autonomous-driving capabilities. ElectraMeccanica Vehicles Corp.’s “Solo” model has just three wheels. Then there’s 2020’s hottest financial fad: SPACs. Many have merged with electric-vehicle groups, and one peculiarity of these deals is that the companies are allowed to publish detailed multi-year financial forecasts, unlike in a regular initial public offering. These projections are often extremely bullish. Like Arrival, Fisker Inc. — an asset-light electric-auto business whose shares have soared — is yet to commence commercial sales. Even Musk is worried about SPACs, though he hasn’t said which ones.These new companies claim to have a solution for the manufacturing difficulties and massive capital outlays that almost sank Tesla. Drawing a comparison with the way Apple Inc. outsources phone production to Foxconn Technology Group, Fisker plans to subcontract manufacturing of its Ocean SUV to Canadian auto-parts supplier Magna International Inc. Electric- and hydrogen-truck maker Nikola Corp. is pursuing a similar strategy with partners GM and CNH Industrial NV. Others are taking a different approach. Electric-pickup startup Lordstown Motors Corp. acquired a factory from GM and has licensed technology from Workhorse to speed its market entry. Not to be outdone, Arrival claims to have reinvented the car assembly line. It plans to construct smaller, cheaper “microfactories” situated closer to where products are sold. Greater automation will reduce the need for human labor, it says.However you produce vehicles, though, there’s plenty to trip you up. More than a third of Workhorse’s factory staff have had to down tools because of suspected coronavirus infections. Li Auto recalled all 10,000 electric SUVs produced before June, after it found a potential suspension problem. Workhorse and XPeng both warned recently of battery supply bottlenecks. A big test for wannabe Teslas will come when they’ve burned though their cash and need to ask equity and debt investors for more, as Tesla and Nio have done repeatedly. ElectraMeccanica warned in its latest accounts that its “ability to continue as a going concern will depend on our continued ability to raise capital on acceptable terms.”All of this may have short sellers licking their lips, but Tesla’s rise shows the danger of betting against the bubble. Nikola was the subject of a scathing report from Hindenburg Research that questioned its technology, and which forced the departure of its chairman. Yet its market capitalization now exceeds $11.5 billion.Diess may be right about carmakers becoming the most valuable companies. It’s inevitable, however, that some won't make it.(1) Basis of calculation: the transaction at $10 a share valued Arrival's equity at $6 billion. Shares of the CIIG Spac are now trading at $26.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.