Nikola Motors Stock has the internet abuzz. Are they the next Tesla? If you frequent any stock market message boards…you’ll see many people who believe that.
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Nikola Motors Stock ($NKLA) Introduction
Nikola Motors is a zero-emissions tractor-trailer (also known as Class 8 vehicles) manufacturing company based in Arizona. This company has an enormous vision of the future – can you buy Nikola Motors Stock? Yes, you can. As of June, the stock ticker is NKLA. Did you see the price action on it?
What on Earth Is a “SPAC”???
The short answer to whether you can buy Nikola Motors stock is YES! You can buy shares of Nikola Motors stock, or at least the company about to become Nikola Motors.
VectoIQ, trading under the ticker symbol VTIQ, is a Special Purpose Acquisition Company, or a “SPAC.” Often called “blank check companies,” SPACs are publicly traded companies that do not have operations.
Instead, it exists simply to raise capital to acquire another existing company. They typically have two years to complete a transaction, or the company will be liquidated and the money returned to the investors.
Entrepreneurs may like this option because it is faster than the traditional IPO process and is less exposed to the vicissitudes of the market.
During uncertain market periods like we are currently experiencing, we often see fewer IPOs because companies are unlikely to get what they think they are worth when investors are on the sidelines.
VectoIQ completed its IPO in May 2018, listing common shares at $10. The stock price didn’t stray far from that $10 mark until the reverse merger with Nikola was announced on March 2nd.
Nikola is led by Stephen Girsky, a former General Motors executive, so it’s no surprise they found a company in the vehicle manufacturing industry.
A special shareholders meeting will be held on June 2nd to vote on the Nikola Motors transaction. Assuming approval by shareholders, the deal should close within a couple of weeks after the vote.
Nikola Motors Stock History
Nikola Motors was founded in 2014 by Trevor Milton, who is described on the website as a “serial entrepreneur.” Milton was the founder and CEO of dHybrid Systems, LLC, a natural gas storage technology company that Worthington Industries acquired. Mark Russell joined Nikola Motors in February of 2019 after six years as the Chief Operating Officer of Worthington.
Nikola has ambitious plans for the future, as evidenced by its mission statement: “Transform the transportation industry while improving employees’ lives and leaving the world a better place.” It is organized into three divisions. The Motor Company will design, build, and market pure-play electric semi-trucks and hydrogen-electric drive trains for semis.
The energy company will build a network of hydrogen refilling stations for their trucks to refill nationwide. Finally, the power sports division will make electric off-road vehicles and personal watercraft for commercial and military markets.
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Hydrogen Technology
While Nikola will be making battery-powered trucks, they are betting big on hydrogen technology. They intend not only to build the trucks but also to build out the filling stations that will allow the technology to be widely implemented.
Nikola believes they can match battery-powered electric motors in horsepower and zero emissions while eliminating issues like long recharge times, limited range, and extra weight.
Investors should be wary of lawsuits going both ways already between Nikola Motors stock and Tesla. Nikola recently won a small victory in one of these cases, but the battle appears far from over.
Check out our live trading room. This is where we discuss stocks to trade and support and resistance on stocks like $VTIQ.
Nikola Motors Stock Chart
Check out the hourly chart today. Very nice price action – a day traders delight.
Nikola Motors Stock Financials
Nikola Motors currently does not have revenue. I found two press releases regarding partnerships to begin building trucks – one with a company in the US and one in Europe – but it doesn’t appear that there have been any deliveries of their vehicles yet.
However, they have $14.3 billion in “pre-order reservations,” including an order for 800 trucks from Anheuser-Busch.
If VectorIQ’s shareholders approve this merger, the transaction will increase the cash on Nikola Motor’s balance sheet by $530-770 million, which the company plans to use in building a plant in Coolidge, AZ. When the deal closes, the stock ticker will change to NKLA.
Nikola Motors Stock Short Interest
Short interest increased today. I tend to follow short interests to get an idea if there will be a strong short squeeze when a catalyst comes around…like approval, PR, or something along those lines. Be sure to check short squeeze for updates on the data chart below.
Tracking the short interest is always a good idea if you are TRADING a stock.
Final Thoughts
At this time, this stock is highly speculative. With that said, with high risk comes the potential for very large rewards.
Tesla has proven an enormous appetite in the market for companies that can help transition the world from burning fossil fuels to moving products and people around the planet. After a huge run-up the past two weeks,
NKLA is trading upwards of $50 as of June 8th, giving it a market cap of around $5 billion. Tesla’s market cap is currently around $150 billion; if NKLA stock can grow to that valuation, that would represent a 23,000% gain. Using Peter Lynch’s baseball terminology, that’s a 230-bagger! Not bad.
What do you think? Is Nikola Motors stock worth a gamble? What do Stock Navigators say about $NKLA?
Regardless of your thoughts, if you need to learn stock trading, we have your back. The Bullish Bears has a live trading room and two daily webinars to help you master the art of technical analysis for stocks, options, or futures.
