Why Nikola Stock Lost 17% Last Month

Traders continue to plot back from SPACs.

Jeremy Bowman

What came about

Shares of Nikola (NASDAQ:NKLA) continued their downward waft remaining month because the special cause acquisition company (SPAC) bubble continued to deflate, dragging down the maker of hydrogen and electrical autos. Nikola’s head of gasoline cell style stepped down on the origin of the month, weighing on the stock, however traders did receive some staunch files when the corporate acknowledged it would originate installing hydrogen fueling stations in California.

In accordance with files from S&P Global Market Intelligence, the EV stock done April down 17%. As you’d look from the chart below, the stock declined for lots of the month, sooner than reversing direction when the fueling situation files broke.

NKLA Chart

NKLA files by YCharts

So what

Nikola has been a poster child for the SPAC yelp all over the last several months. These are firms taken public by a shell company, many of which could presumably well have struggled to dawdle public through a pale IPO direction of. Nikola, which went public with out a earnings or even a viable product, is a high example of SPAC bust because the stock has plunged since its height almost a pair of twelve months ago. It has been mired in scandals, collectively with that it faked an operational automotive, which forced the founder to step down. SPACs in general have been getting more scrutiny in fresh weeks, and traders seem to utter that many are puffed up, built on minute better than lofty guarantees.

A Nikola pickup truck on rocky terrain

Image source: Nikola.

Nikola stock additionally took a dive on April 7, falling 7%, after Bloomberg reported that the corporate’s executive vice chairman of craftsmanship, hydrogen, and gasoline cells had left the corporate on April 1.

Shares incessantly declined through April 20 as Wedbush additionally slashed its trace target from $25 to $13, citing the unfortunate tune file in the corporate’s execution to this point. The stock temporarily dipped below $10 or the degree at which guardian company VectoIQ went public in 2018. Alternatively, Nikola jumped on April 22 on files that it would team up with TravelCenters of The United States to set up two hydrogen fueling stations in California by 2023. 

Now what

As a prerevenue company, Nikola remains a crapshoot and is more likely to be unstable. The stock has already fallen 10% throughout the first three sessions in Might perchance presumably maybe sooner than its first-quarter earnings legend. Since the corporate would now not have any earnings but, the legend would now not raise the identical outdated relevance, however this will provide traders with an update on the corporate’s development. 

After several months of declines, even supposing, the market is clearly skeptical in regards to the stock’s prospects.

This article represents the thought of the author, who also can honest disagree with the “legitimate” suggestion plight of a Motley Fool top rate advisory carrier. We’re motley! Questioning an investing thesis — even thought to be one of our beget — helps us all utter severely about investing and fabricate choices that encourage us turn into smarter, happier, and richer.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.”>

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