One of the hottest new companies to emerge onto the public markets is Nikola (NASDAQ: NKLA). The aptly named company is looking to compete with Tesla (NASDAQ: TSLA), offering its own form of electric semi-truck in an effort to seize early market share away from its much larger rival. While still staying far away from electric cars for now, there’s still an incredible amount of excitement surrounding this company at the moment. However, despite shares having suffered a significant decline earlier this week, Nikola has seen a complete reversal, ending Thursday’s trading session close to record highs.
Since going public, Nikola has seen its share price multiply over the past couple of months. However, the company ended up witnessing a major setback earlier this week when a negative article from Bloomberg sent shares tanking. Among other things, the article alleged that Nikola’s CEO, Trevor Milton, had deceived investors earlier in regard to the state of their electric trucks. This includes quoting anonymous sources that the company’s flagship model lacked crucial components, such as fuel cells, but that Milton had said that the truck was fully functional during a 2016 event.
The company had previously promised that deliveries of this new electric truck would begin sometime in 2020, although this seems to have been pushed back as Nikola now expects no revenue for the rest of this year. This, in turn, has led to further concerns about the company, helping fuel the initial sell-off seen earlier this week.
However, Milton responded to these allegations in a lengthy Twitter post on Thursday. He went on to post an entire legal response letter that the company’s lawyers had sent while threatening to do everything in his power to fight back against these claims.
“This just got sent to Bloomberg by our legal team. I wont stand for lies from Journalists when they knowingly deceive to harm others – It hurts all journalists. Wait until the full recorded interview comes out and it will expose Ed Ludlow for who he is,” tweeted Milton. “This is when you get sued. He did validate the bad information he got. he never interviewed the crowd who came, the engineers who work here and he intentionally did not report the truth from my interview this morning. You can lie but you will held accountable.”
While its hard to tell whether or not genuine legal action will follow from this affair, the tenacity of Milton’s response was enough to assuage at least some investors about the state of the company’s electric truck. However, with no revenue to speak of, some more cautious investors are struggled to justify the company’s significant market valuation.
Shares ended up jumping just under 10% on Thursday, recovering to around $67 per share. While a tad bit shy from the $79 peak seen earlier this month, Nikola could easily end up shooting past that point if everything goes well for the company.
Nikola Company Profile
Nikola Corp is a designer and manufacturer of battery-electric and hydrogen-electric vehicles, electric vehicle drivetrains, vehicle components, energy storage systems, and hydrogen fueling station infrastructure. – Warrior Trading News
