The company Nikola and General Motors have completed a deal to buy an 11% share Nikola for $2 billion, but not stopped negotiations after the scandal with the investigations and class action, which was based on allegations of fraud Nikola.
The company is engaged in the development of hydrogen trucks and pickups Nikola (NKLA) and the largest American automaker General Motors (GM) has not completed its deal last week. However, Nikola shares increased by 24.6% at the end of last week on expectations that continuing negotiations, the company will agree on a greater share of the purchases as the shares of Nikola plummeted in the last month.
In early September, GM agreed to acquire 11% stake of shares Nikola, investing around $2 billion, to jointly produce electric truck hydrogen fuel cell Badger in 2022. It was a fantastically good deal for the company Nikola, do not have their own factories.
However, the prospects of the deal and even all the young company Nikola was undermined by the September 10 release of the report of the company Hindenburg Research, well-known firms engaged in “short sales”.
Referring to investigations and the “evidence” the Hindenburg Research company accused Nikola in the “ocean” of fraud and statements, deliberately misleading investors to have partnership with the largest automotive OEM manufacturer in America. Read more about Marketinfo.pro wrote in the article “Nikola Shares fell 25% after BP refused the deal for the hydrogen stations”.
Last week, several legal and law firms supported the class action lawsuit of shareholders Nikola in the U.S. District court for the district of Arizona, with charges of fraud company.
According to reports, the Commission on securities and exchange Commission (SEC) and the Ministry of justice began to investigate allegations for allegations that Nikola has introduced investors astray.
Founder Nikola Trevor Milton later resigned as Chairman, the crisis has added to the scandal when two women accused him of sexual assault.
Executive Chairman Steve Nikola Girsky and CEO mark Russell last week tried to distance himself from the role of Milton at the moment for the company because he put all his authority and is now only a shareholder for the company.
Nikola has appointed Steve Schindler new independent Director of the Board of Directors.
GM and Nikola did not disclose details of the ongoing negotiations, but analysts point out that this deal will probably depend on the fate of Nikola.
Claiming high risks for the company, Wedbush analyst last week lowered its rating on the stock Nikola from “neutral” to “Underperform” (rating is worse than neutral but better than “to sell”) and reducing the target price from $45 to $15, which speaks about the forecast of 60% stocks to fall.
JPMorgan analyst Paul Fire confirmed that “a partnership with GM is the most important short-term catalyst” for the stock ski. “The inability to complete the transaction with GM would be a death blow to the initiative of the pick-up Badger, and, in our opinion, a serious blow to a more important initiative in the field of production of trucks”.
The analyst added that “at the moment, the partnership with GM is a stress test for the company … out of the deal GM will be a serious blow to the schedule, the structure of the margin and make of truck Nikola”.
