We said back in July to buy the dip in Nikola when the stock dropped to $29. Our write-up, which has since been updated, you can read here. We said:
Over the next one to two years, we believe Nikola stock will continue making new highs. The story is there. Market demand exists. The market potential is enormous. Buckle up and enjoy the hydrogen lift-off in Nikola stock.
Our thesis just got validated after Nikola signed a deal with GM that is a game-changer all around. The deal really silenced the critics and short sellers that have been badgering founder Trevor Milton, who had this to say on Twitter.
Thank you for those who have defended me / the company in the past. Welcome to those who are new followers or have started to believe in us. I may be a bit out there sometimes, I know, but it is also what drives my creativity. Executing a vision is fun #spreadlovenothate
— Trevor Milton (@nikolatrevor) September 8, 2020
As we dive in, the bear camp just got destroyed with this news, and Nikola stock looks set to climb back towards the highs on this Nikola GM news. In this article, we look at the Nikola GM deal and why it’s a win-win for both Nikola and GM.
Before we get into our analysis, here’s a little background info for those that aren’t familiar with. On June 4th, electric heavy-truck maker Nikola began trading on the Nasdaq after its merger with VectoIQ (VTIQ) was approved by shareholders. The IPO provided Nikola with more than $700M in new cash, much of it from a transaction involving Fidelity Investments and P. Schoenfeld.
Founded in 2014, the company has developed a series of all-electric Class 8 trucks that can be powered by batteries or hydrogen fuel cells. It has over 14,000 preorder reservations for the trucks, representing more than $10B in potential sales.