⛟ GM Stake Tows Nikola Higher
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Market Snapshot 📈
S&P 500 (Wednesday Close) 3,398.96 +67.12 (2.01%)
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⛟ GM Stake Tows Nikola Higher
Nikola Shares rallied 40% on Tuesday after GM Announced 11% Strategic Stake in the Company
What Happened? In a deal that is seen as a huge positive for both parties, General Motors announced a strategic partnership with Nikola, that gives Detroit-based automaker, 11% stake in Nikola. The new partnership gives GM the right to nominate one board member in exchange for in-kind services. For a deal that is worth $2B, both GM and Nikola are expected to save $4B!
For one, the EV maker does not have to commit billions of dollars in setting up a manufacturing plant since the Badger pick up will be built at a GM plant. For GM, this partnership represents high-volume commercialization of its Hydrotec fuel cells.
Under the agreement, GM will produce the electric truck maker’s pickup truck, Badger, by the end of 2022, with GM’s flagship Ultium battery platform system as an option. The deal will eventually cover Nikola’s other vehicles in the offing, including Tre, One, Two, and NZT.
The agreement makes GM the exclusive supplier of Nikola’s fuel cells globally (except in Europe) while allowing Nikola access to GM-validated parts and its deep expertise in vehicle manufacturing and EV technology.
Nikola, which is yet to produce or sell a vehicle, has a market cap of over $16B.
The transaction is expected to close on September 30.
Market Reaction: Nikola shares rallied over 40% on Tuesday, but gave back some of the gains in Wednesday trading. GM stock also rallied 8% on Tuesday but dropped 1.3% yesterday.
Nikola Snapshot 📈
NKLA $42.37 -7.68 (-15.34%)
Analyst Rating (5 Ratings) BUY 40% HOLD 60% SELL 0%
There's Hope: AstraZeneca expects COVID vaccine result by year-end if trials resume (AZN -1.96%)
Struggles are Real: Facebook is struggling with speech rules before 2020 elections (FB +0.94%)
No Pull: A year later, Amazon’s voice assistant alliance still hasn’t attracted any of its rivals (AMZN +3.77%)
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Later Today 🕒
6.00 PM IST: Initial jobless claims (regular state program, SA)
6.00 PM IST: Initial jobless claims (total, NSA)
6.00 PM IST: Continuing jobless claims (regular state program)
6.00 PM IST: Continuing jobless claims (total NSA)
TAS: Broadcom Inc (AVGOP) Earnings
After Market Close: Peloton Interactive Inc (PTON) Earnings
Fun Fact of The Day 🌞
The largest known living organism is an aspen grove.
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