🚚 Nikola: Recharging Its Batteries?
Roku surges on earnings beat. Volkswagen's new investment plan.
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🚚 Nikola: Recharging Its Batteries?
Nikola’s (NKLA) losses were lower than expected and its plans for new product introductions and partnerships during 2021 are holding steady. This is in spite of supply chain worries and regulatory concerns. Reason enough for investors to cheer up! (Tweet This)
Fast Rise, Faster Fall
A $12B IPO through a SPAC was just the kind of validation Nikola needed to compete with the likes of Tesla in the EV market. For a company still in the pre-revenue stage and facing multiple regulatory woes, the stock performance was akin to a fairy tale. Within a week of its IPO, the stock had shot up 150%. And then the wheels began to come off.
General Motors had signed up for an 11% stake for in-kind contribution to helping Nikola develop its badger electric truck. After accusations flew regarding fraudulent claims by Nikola and its then CEO Trevor Milton, GM dialed down expectations and remained as just a “partner.” An SEC investigation into these questionable claims led to the ouster of Milton.With no good news to hang on to, the stock continued its downward spiral and is currently down 80% from its peak. As Nikola picked up the pieces, it announced a $100M share sale to investors in order to ensure adequate capital for the next 12-18 months. In March, the SEC issued a subpoena on Nikola's projections of 2021 cash flow and anticipated use of funds from its proposed capital raise.
Ray Of Hope
For the recently ended Q1, the company reported a loss per share of $0.14, which was better than analyst expectations of a loss of $0.27. The company also reiterated production timelines and delivery milestones. In another hopeful sign, the first batch of five battery-electric Tre semi trucks have begun validation testing in the US. A second batch is expected to come online soon as well.
The company is weary of the tenuous supply chain, but remains confident of delivering 1,200 battery-electric trucks in 2022 and 3,500 in 2023. It has already projected 50-100 Tre deliveries this year alone, and has drawn a line in the sand for generating $15M-$30M in revenue.
The company has also received a letter of intent from Total Transportation Services for 100 battery-electric and fuel-cell trucks. This collaboration is expected to kick-off zero emission solutions in the ports of Los Angeles and Long Beach. Nikola also announced a deal with TravelCenters of America (TA) for installing hydrogen refuelling stations for heavy-duty trucks, expected to begin operations by Q1 2023.
After falling off the cliff, Nikola seems to be slowly emerging and has a story to tell. While the baby steps are slowly but surely taking shape, the company definitely has a long way to go, if it is serious about living up to its billing. Market Reaction
NKLA snapped an eight-day losing streak to end at $11.50, up 13.41%.
Company Snapshot 📈
NKLA 11.50 +1.36 (13.41%)
Analyst Ratings (8 Analysts) BUY 25% HOLD 75% SELL 00%
Newsworthy 📰
Defects: Ford Recalls 661K Explorer SUVs In North America. (F +0.68%)
Optimism: Roku Shares Surge On Q1 Earnings Beat, Strong Guidance (ROKU +11.55%)
Spending: Volkswagen Confirms New Investment Cycle For Brazil plants (VWAGY +2.29%)
Fun Fact of The Day 🌞
Facebook’s main colour is blue as Mark Zuckerberg suffers from red-green colour blindness.
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