Will GM's deal with Nikola still close tomorrow?
Sep. 29, 2020 4:44 AM ET|About: Nikola Corporation (NKLA)|By: Yoel Minkoff, SA News Editor
"Our transaction with Nikola (NASDAQ: NKLA) has not closed," a GM spokesperson said Monday in an email. "We are continuing our discussions with Nikola and will provide further updates when appropriate or required." The deal was expected to close by September 30.
Compare that to a statement from GM last week, which said it remained committed to the agreement as outlined on Sept. 8. The deal calls for GM to build the Nikola Badger electric pickup with its proprietary Ultium batteries and provide fuel cells for the Badger and Nikola's semitrucks.
"Even if Nikola completely imploded and went out of business tomorrow, GM financially would not be hurt by that," said David Whiston, senior equity analyst for Morningstar. "If Nikola is not a fraud, the long-term upside option value of the deal is still there for GM."
Earlier this month, GM CEO Mary Barra defended the company's $2B, non-cash deal with Nikola, saying it conducted "appropriate diligence" before announcing the agreement.
Compounding the recent troubles, two women have filed sexual abuse complaints against Nikola founder Trevor Milton that stretch back more than 15 years ago, though Milton has "strongly denied" the allegations.
NKLA -3.1% premarket to $18.70/share.
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