Electric Truck Maker Nikola Sees Share Price Double

Electric Truck Maker Nikola Sees Share Price Double

over 3 years ago2 mins

Mentioned in story

Meet Nikola: not the first electric automaker named after a certain Serbian-American inventor, but one now competing for investors’ attention after its share price more than doubled this week. That values the firm more highly than Ford – despite the fact it expects to generate precisely zero revenue in 2020… 🤯

What does this mean?

Nikola, a previously private company which debuted on the stock exchange last week following a reverse merger, saw its valuation grow 103% on Monday and another 7% on Tuesday after it announced it was taking reservations for its Badger pickup truck. That left Nikola worth more than Ford – an auto firm which had sales of $156 billion last year.

What’s more, the Badger may never see the light of day unless Nikola finds a production partner. The Arizona-based company is currently focused on delivering its Tre battery-powered big rig next year, followed by two heavy-duty hydrogen fuel cell vehicles for which it boasts 14,000 pre-orders already 👏

Problem is, converting those promises into cash could prove tricky. And as Tesla has previously found to its cost, production targets can be maddening to meet – even if Nikola stands to benefit from the expertise of European machinery mogul CNH Industrial.

Source: Bloomberg
Source: Bloomberg

Why should I care?

Tesla shares have also more than doubled this year, regardless of its failure to turn an annual profit. Investors seem willing to take a stake in firms which could form part of the future of vehicles, while doubting the ability of incumbents to change lanes. Some, however, worry that such a dramatic reversal of fortunes may be overdone... 😬

With consumer spending and new vehicle loans under pressure, perhaps investors would be better off going for something with a few miles under its belt. Enter Vroom: a (loss-making) online used car marketplace which itself debuted on the stock market on Tuesday – and promptly saw its share price double. Despite unpromising beginnings, 2020 may be a good year for newly public companies…

The Renaissance IPO Index is outperforming the US S&P 500 by its most in a decade (Source: Bespoke)
The Renaissance IPO Index is outperforming the US S&P 500 by its most in a decade (Source: Bespoke)
Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

Finimize
© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG