Tesla competitor Nikola is doomed to fall 40% in a month, a famed short-seller says

Tesla competitor Nikola is doomed to fall 40% in a month, a famed short-seller says
Nikola Badger Electric Pickup Truck.Nikola
  • Nikola has been on a tear since it went public last week — the electric-truck maker's stock doubled in one day as investors, hungry for another Tesla-like stock to invest in, piled into it.
  • At one point, Nikola, which has yet to sell a single car or generate revenue, saw its market valuation surpass car giants such as Ford and Fiat Chrysler that sell millions of cars every year.
  • The short-seller Andrew Left of Citron Research said this week that the party's over and that he expects Nikola to fall by 40%, to $40, over the next month.
  • "The anti-Tesla If you buy here you deserve to lose your $$ considering Milton sold just a week ago at $10," Left tweeted on Tuesday.
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Nikola, a Tesla competitor, has been on a tear since it went public last week, with its stock more than doubling in one day.

But don't expect that run to last long, the famed short-seller Andrew Left of Citron Research said this week.

With the electric-truck maker's market valuation briefly surpassing car giants such as Ford and Fiat Chrysler — though it hasn't sold a single car — Left said investors deserved to lose money if they bought its stock at current levels.
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"$NKLA back to $40 in a month," Left tweeted on Tuesday. "The anti-Tesla If you buy here you deserve to lose your $$ considering Milton sold just a week ago at $10. When $TSLA had this mkt cap the Model S was scaled and X was produced. There is no real IP at $NKLA and PR's have been overly promo."

Nikola shares traded at $65 as of Wednesday's close, so a drop to $40 would represent a decline of 40%.

Read more: Famed short-seller Andrew Left lays out his methodology for finding the stock market's weakest links — and says he's terrified of newbie day-traders that think they can outsmart Carl Icahn and Warren Buffett
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Left pointed to the progress Tesla had made when it sported Nikola's market cap years ago: Tesla had scaled production of the Model S and was starting to produce its Model X crossover SUV.

Meanwhile, Nikola has yet to produce or sell a single car and doesn't expect to generate any revenue until 2021. Left chalked up Nikola's meteoric rise to the company's overpromotion to retail investors. Nikola is already 30% off its 52-week high of $93.99. The decline could be attributed to short-term traders taking profits, as well as to Tesla recently telling employees it plans to scale up production of its Semi truck that it revealed in late 2017.
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Nikola, which plans to sell an electric semitruck dubbed the Badger, has said it has potential revenue of $10 billion from preorders from customers like Anheuser-Busch. The Badger is designed to directly compete with Ford's F-150.

Left also pointed to Nikola CEO Trevor Milton's sale of shares at $10, suggesting that Milton might think the stock is overvalued.
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Nikola shares traded down 15%, at $55.10, early Thursday.

Read more: Renowned strategist Tom Lee nailed the market's 40% surge from its worst-ever crash. Here are 17 clobbered stocks he recommends for superior returns as the recovery gains steam.

Tesla competitor Nikola is doomed to fall 40% in a month, a famed short-seller says
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