Nikola: GM Deal Doesn't Add Value
Nikola is still waiting on GM to finalize their strategic partnership.
The company apparently needs GM's battery and fuel-cell technology to build superior second generation trucks.
The stock is worth nearly $11 billion prior to an equity distribution to GM.
Nikola has too much risk without a GM partnership and not enough proprietary technology with a deal to make the stock a buy here.
Nikola (NKLA) soared 15% on Wednesday following circulation of an internal report showing General Motors (GM) had finally signed the deal to work together. While a signed partnership from GM does solidify Nikola as a viable EV company, the deal doesn't make the stock a bargain. Contrary to my thinking, Nikola hasn't completely collapsed on the departure of founding CEO Trevor Milton, but my investment thesis remains negative with the stock up at $25.
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