- Nikola turned around from intraday low and collected as much as 15% on Wednesday after JPMorgan defended the company after a discussion with Nikola management.
- “The overall message was reassuring: no loss of momentum with existing partners, potential customers, suppliers and employees,” JPMorgan analyst Paul Coster said in a note Wednesday.
- Nikola has ping-ponged back and forth over the past week after a short-seller report helped deflate stock gains associated with its $ 2 billion partnership with General Motors.
- “Never a dull moment with this stock,”
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“Never a dull moment with this stock.”
That’s what JPMorgan analyst Paul Coster said about Nikola in a note Wednesday after a discussion with electric vehicle management CFO Kim Brady.
Over the past week, Nikola Warehouse has been a roller coaster. Shares jumped more than 50% after announcing a $ 2 billion partnership with General Motors, but those gains quickly evaporated after short seller Hindenburg Research accused the company of fraud and deception.
From there, both Hindenburg and Nikola contacted the SEC, and it has since been revealed that both the SEC and the DOJ are investigating allegations from Hindenburg about Nikola.
On Wednesday, Nikola shares completed a recovery after being down as much as 8% and accumulating 15% from the low intraday after the note from JPMorgan.
“The overall message was reassuring: no loss of momentum with existing partners, potential customers, suppliers and employees,” Coster said.
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Brady told Coster that some of the issues related to the short-seller report are events that preceded Nikola’s SPAC merger earlier this year, and some prior to the company’s founding in 2014.
In addition, Nikola’s production partners such as Bosch have “conducted extensive due diligence for the company,” the note said.
Brady told JPMorgan to expect tighter announcements going forward and did not confirm or deny that regulators are investigating the company. “[Brady] sounded a little frustrated with how things are being reported in the media at the moment, ”Coster said.
Finally, referring to a Nikola director’s comment that the company went public prematurely, Brady disagreed, saying Nikola does not regret going public as it did because it helped the company enable execution, according to the note.
JPMorgan continues to rate Nikola as “overweight” with a price target of $ 45, representing a potential upside of 37% from Tuesday’s close.
Nikola shares jumped as much as 15% from its intraday low of $ 30.25 in Wednesday trading, rising up to 5% for the day.
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