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Nikola Shares Drop 24% after GM Scales Down Partnership Deal

Nikola shares have been on a rollercoaster in the past few months. In early September, the company registered a spike after it announced the GM partnership. However, shortly after, Hindenburg Research published a report that claimed Nikola had deceived investors to bump up its price. The short seller pointed to Trevor Milton, the founder and chair of the company, as the perpetrator. While Nikola denied the charges, Milton eventually stepped down as chair.

However, shortly after, GM CEO Mary Barra confirmed that her company was still determined to work with Nikola. In an interview with Bloomberg, Barra reassured investors that the two were laboring to get started on the Nikola Badger. Nikola shares shot up 11% following the announcement.

Nikola’s share price is just one of the many in the electric vehicle industry that has tumbled in recent weeks. After a rally that saw some EV companies double their valuation in weeks, uncertainty about the industry’s future is catching up with most companies.

Workhorse Group Inc, Ayro Inc., China’s XPeng Inc and Canada’s ElectraMeccanica have all seen their shares tumble in recent weeks. The leader Tesla Inc (NASDAQ: TSLA) recorded a 34% drop in September following the listing of additional shares worth $5 billion.

Last week, shares of Evergrande Auto dropped by 11% after reports emerged claiming that a Chinese authority was investigating the firm. The National Development and Reform Commission is reportedly looking into how much property the company owns, its development progress and the amount of investment it has raised.

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