Did General Motors Just Make A Big Mistake???
Nikola Corporation operates as an integrated zero emissions transportation systems provider. It designs and manufactures battery-electric and hydrogen-electric vehicles, electric vehicle drivetrains, vehicle components, energy storage systems, and hydrogen fueling station infrastructure. The company also develops electric vehicle solutions for military and outdoor recreational applications.
Nikola has plans to disrupt the trucking industry just like Tesla is disrupting the car industry. Nikola will make smaller heavy-duty trucks…battery-powered, like Tesla cars. The larger semi-trucks are powered by hydrogen fuel cells and are due to be sold around 2023. Nikola also has plans to make pickup trucks like the Ford F-150, but that’s down the road.
Nikola went public several months ago by way of a special purpose acquisition corporation. Now Nikola has the “bag,” but no product to show for itself…that was until this past week.
GM’s (GM) stock price jumped 9.8% on Sept. 8 after the automakers announced a deal with a startup called Nikola that has never even built a vehicle. The deal gives GM an 11% stake in Nikola, in exchange for a $2 billion investment. GM will build an electric pickup truck for Nikola called the Badger, due in 2022. GM will also supply batteries and other components for the Badger, along with more advanced technology—hydrogen-powered fuel cells—for at least two series of electric commercial trucks Nikola plans to build.
GM is also providing engineering and development work needed to prepare the Badger pickup as well as access to GM's global parts, including GM's new Ultium electric-vehicle battery system and the Hydrotec hydrogen fuel cells developed by GM in a joint venture with Honda Motor. The partnership is also saving Nikola over $4 billion in battery and powertrain costs over the next 10 years and over $1 billion in engineering costs.
But the question is now becoming did GM perform their due diligence and make a mistake…well not according to Short Seller Hindenburg Research? Short seller Hindenburg Research published a report on Thursday, stating that the Nikola is built on lies and that Nikola has misled partners by making false claims about the company's technology, including its hydrogen fuel cell batteries, which Hindenburg says never existed.
Now when news of GM and Nikola’s partnership was announced GM’s stock price shot up 8%. That huge for a company like GM. However, since the announcement and with news from Hindenburg Research, GM is now trading back at a level prior to the announcement. The chart suggest even if price can close above the bottom of the wedge pattern, sellers will be waiting to get short at the monthly supply at $37.50
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
Posted Using LeoFinance
