Nikola goes public – and brings on the fireworks

Nikola Badger
Nikola Badger, © Nikola

Long anticipated, Nikola Motors [Nasdaq: NKLA] finally goes public. In order to get a foot in the door early, the truck maker used a reverse merger. Investors acquired a public shell company, a special type of investment vehicle.

By issuing new shares, Nikola raised USD 700 million. The stock shot up from around USD 33 (original issue price: around USD 10) to over USD 90. Nikola’s market cap, an impressive USD 25 billion, is the result of high expectations. And yet, it seems a bit over the top to me. By that logic, Ballard, which is already producing commercially available stacks for buses and trucks in China, would have to be worth USD 10 billion or more by now. My theory.

A positive turn is that Nikola already has 14,000 trucks on preorder, worth well over USD 10 billion. A fuel cell system and a small battery will provide them with a range of around 1,100 kilometers (684 miles). The hydrogen tank, which holds 100 kilograms, will be used on long-distance trips, while the battery will meet short-term needs. Other vehicles, including an SUV and a pickup truck named Badger (equipped with either a battery, a fuel cell and a battery, or a fuel cell retrofit kit), are to be introduced at a later date.

read more in H2-international August 2020

Risk warning
Share trading can result in a total loss of your investment. Consider spreading the risk as a sensible precaution. The fuel cell companies mentioned in this article are small- and mid-cap businesses, which means their stocks may experience high volatility. The information in this article is based on publicly available sources, and the views and opinions expressed herein are those of the author only. They are not to be taken as a suggestion of what stocks to buy or sell and come without any explicit or implicit guarantee or warranty. The author focuses on mid-term and long-term prospects, not short-term gains, and may own shares in the company or the companies being analyzed.

Author: Sven Jösting, written June 13th, 2020

Leave a Reply