Nikola sheds 15% after CEO says it has plan to work without GM if deal falls apart
Nikolafell on Friday after its CEO told Bloomberg on Thursday that it had plans to work on its own if a deal with General Motors falls apart.
- Talks between the companies are ongoing, with a December 3 deadline to reach a deal.
- Nikola CEO Mark Russell said the company needed an OEM partner to manufacture its Badger electric-pickup-truck prototype and would abandon the car if it can't find one.
- Shares of Nikola have been in a tailspin since Hindenburg Research released a report in September accusing the company of deception, fraud, and misleading investors.
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Shares fell as much as 15% on Friday. They're down more than 50% since Hindenburg Research released a short-seller report on September 10 accusing the company of fraud, deception, and misleading investors.That report came two days after Nikola announced a partnership with GM worth $2 billion. Talks are ongoing, with a December 3 deadline to close a deal.
"The Badger is part of our discussions with GM. And we've been clear all along that we wouldn't build a Badger without an OEM partner," Russell told Bloomberg in an interview on Thursday.Read more: GOLDMAN SACHS: Buy these 21 high-growth stocks that have huge upside potential as future index leaders
But Russell said Nikola had a "base plan" if the deal with GM is off. "If we have a partner," he added, "that just enables us to consider going faster and helps reduce the risk."A deal with GM is still possible. Bloomberg said GM could seek an increased stake in Nikola given its depressed valuation since the deal was announced last month. Another option would be for GM to receive warrants on Nikola. Regarding Nikola's hydrogen-fueling-station ambitions, Russell said Nikola was still targeting a deal with an energy company by the end of the year. Bloomberg reported last month that Nikola had held talks with BP, but those were put on hold after the Hindenburg report, which led to the resignation of Trevor Milton, Nikola's founder.
If no deal is reached, Russell said, Nikola plans to develop hydrogen-refueling stations on its own.
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