| To: kidl who wrote (121) | 9/17/2020 3:24:37 PM | | From: JubilationT | | | | | Yes, it is possible that the DD was limited to the financial part. To me, it would be a no brainer to look beyond merely the numbers. GM could do that from home but he says he took with him a team of DDers. So does GM need a team to physically inspect the #s? Just my opinion but they looked at more than merely the #s. |
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| To: kidl who wrote (116) | 9/19/2020 7:51:19 PM | | From: Gib Bogle | | | | | Obviously Hindenburg are not neutral, but I find them convincing. It looks to me as if Milton thought "If Musk can do it, so can I." We are in an age of alternative facts. Is the SEC completely toothless now? |
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| To: Gib Bogle who wrote (123) | 9/20/2020 10:17:57 AM | | From: kidl | | | | I wouldn’t call the SEC toothless. “Slow bite” is probably a more applicable description. The rumoured DOJ inquiries and possibly resulting investigation could very well speed up the process.
One thing is IMHO undeniable. There is meat on the Hindenburg bone. Whether or not either or both of these “dogs” will go after it remains to be seen. I personally think they will which (for me) turns an already highly speculative stock into a “hands off” stock for the time being. |
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| To: Labrador who wrote (125) | 9/21/2020 6:55:48 AM | | From: kidl | | | | NKLA currently down to $22 (-36%)
Nikola Board of Directors Announces Leadership Transition
Trevor Milton Steps Down as Executive Chairman; Stephen Girsky Appointed Chairman of the BoardPR
Newswire
PHOENIX, Sept. 20, 2020
PHOENIX, Sept. 20, 2020 /PRNewswire/ -- Nikola Corporation (NASDAQ: NKLA) today announced that Trevor Milton approached the Board of Directors and proposed to voluntarily step aside as Executive Chairman and from the Board. The Board accepted his proposal, and Stephen Girsky, former Vice Chairman of General Motors Co. and a member of Nikola's Board, has been appointed Chairman of the Board, effective immediately.
"Nikola is truly in my blood and always will be, and the focus should be on the Company and its world-changing mission, not me," said Milton. "So I made the difficult decision to approach the Board and volunteer to step aside as Executive Chairman. Founding Nikola and growing it into a company that will change transportation for the better and help protect our world's climate has been an incredible honor."
"As we move forward, I am confident Steve is the right leader to guide our vision at the Board level. In addition to being an early believer and supporter of Nikola, Steve has more than 30 years of experience working with OEM leaders, suppliers, dealers, labor leaders and national policy makers, and has served as a director of numerous public companies."
Milton continued, "We've built a deep bench of talent over the years, and I am confident that Nikola's Chief Executive Officer, Mark Russell, supported by Chief Financial Officer, Kim Brady, and the rest of the leadership team will advance our goal of making Nikola the global leader in zero-emissions transportation. I want to thank all of Nikola's employees, investors and partners who have shared in my vision and rallied behind Nikola during this time."
Girsky said, "On behalf of the Board, I want to thank Trevor for his visionary leadership and significant contributions to Nikola since its founding. Trevor saw the possibility of creating an end-to-end zero-emission transportation system when the industry was still in its nascent stages and took action to build the Nikola of today, with world-class partnerships, groundbreaking R&D, and a revolutionary business model. I know I speak for everyone at Nikola in our gratitude and in wishing him all the best."
"We remain committed to delivering on our objectives and creating value for our shareholders," said Mark Russell, Nikola's Chief Executive Officer. "Along with the rest of the management team, I will continue to work closely with Steve and the Board to advance Nikola's vision for the future. Our priorities remain unchanged and, in collaboration with our partners, we are laser-focused on executing on our strategic initiatives and laying the groundwork to become a vertically integrated zero-emissions transportation solutions provider."
About Stephen Girsky
Girsky is a Managing Partner of VectoIQ, LLC, an independent advisory firm based in New York. Girsky has more than 30 years of experience working with corporate board executives, labor leaders, OEM leaders, suppliers, dealers and national policy makers. Girsky served in a number of capacities at General Motors Co. ('General Motors') from November 2009 until July 2014, including vice chairman, having responsibility for global corporate strategy, new business development, global product planning and program management, global connected consumer/OnStar, and GM Ventures LLC, global research & development and global purchasing and supply chain. Girsky also served on General Motors' board of directors following its emergence from bankruptcy in June 2009 until June 2016. Girsky currently serves on the boards of directors of United States Steel Corporation (NYSE: X), a steel producer, and Brookfield Business Partners Limited, the general partner of Brookfield Business Partners, L.P. (NYSE: BBU; TSX BBU.UN), a private equity company. |
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| From: kidl | 9/21/2020 8:05:52 AM | | | | | | Wedbush Securities is out with an early note on the development.
"Trevor stepping down voluntarily at Nikola will be perceived by the Street as a major near-term gut punch for the company's lofty EV ambitions as he plays a key role strategically in driving the company's vision. While there will be a lot of worries on the Street around Trevor's departure especially in light of the bear noise recently with the company, going forward Nikola has a strong bench and now it's all about execution going forward with the GM partnership a linchpin to its success," updates analyst Dan Ives.
"In a nutshell, Nikola is still a prove me stock, which speaks to why we are watching this from the sidelines with a NEUTRAL rating until we can get more confidence in the EV and hydrogen fuel cell execution story over the next 12 to 18 months," he adds. |
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| From: kidl | 9/21/2020 10:10:17 AM | | | | | | Nikola defended at JPMorgan, GM punished for partnership ties
Sep. 21, 2020 9:18 AM ET|About: Nikola Corporation (NKLA)|By: Clark Schultz, SA News Editor
Just days after saying it had a reassuring talk with Nikola's (NASDAQ: NKLA) CFO, JPMorgan cuts its price target on Nikola to $41 from $45, but keeps the faith with an Overweight rating.
Analyst Paul Coster: "We believe the inbound Chairman, a former GM board member, is probably better suited to the next – execution – phase of the company's development, but Trevor Milton's resignation could weigh on some of the partner and customer relationships he has forged, and employee morale is probably fragile right now, just as the workload is intensifying and competitive threat looms. We increased the discount rate in our PV calculation of stock value by 10% to 22%, but left the business model and forward valuation multiple unchanged, on the assumption that the company will still execute to plan given that most developments to date have slightly exceeded our expectations, that is with the exception of Mr. Milton's social media and marketing missteps."
Shares of Nikola are down 26.88% premarket to $25.00. Meanwhile, General Motors (NYSE: GM) is off 4.25% to bleed off its recent gains with its Nikola partnership looking different over the last week. The drop for GM is bigger than what its Detroit are seeing in the early session. |
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| To: kidl who wrote (128) | 9/21/2020 4:28:23 PM | | From: Glenn Petersen | | | | About fifteen years ago, there were quite a few SPAC frauds, There were several Chinese companies that did SPAC deals that were subsequently exposed as paper frauds. One of the problems is that the companies going public via the SPAC route are not put through the investment bank and SEC due diligence grinders. I'm not saying that NKLA is a fraud - I would be very surprised and disappointed if GM did not thoroughly vet the technology - but CEOs that heavily promote their stocks before showing substantive results always make me nervous. A sign of me age, no doubt, and apologies to Elon Musk, the exception to all man-made rules.
Nikola saga hits three speculative areas at once: SPACs, Robinhood traders and electric vehicles
PUBLISHED MON, SEP 21 202011:31 AM EDT
UPDATED 2 HOURS AGO
Pippa Stevens @PIPPASTEVENS13
CNBC.com
KEY POINTS
-- In recent months, three story lines have captivated Wall Street: SPACs, electric vehicle companies and the rise of retail traders.
-- The outsized success of the first two, as well as novice investors entering the market in record numbers, has led some investors to claim this is an indication of froth.
-- One name symbolizes all three themes: Nikola Corporation.The stock’s well-charted rise, and subsequent fall amid accusations from a short-selling firm that led to the founder and executive chairman’s resignation on Monday, begs the question over whether skeptics are right and that these three areas do indicate an overheated stock market.
In recent months, three story lines have captivated Wall Street: SPACs, electric vehicle companies and the rise of retail traders. The outsized success of the first two, as well as novice investors entering the market in record numbers, has led some investors to claim this is an indication of froth.
And one name symbolizes all three themes: Nikola Corporation.
The stock’s well-charted rise, and subsequent fall amid accusations from a short-selling firm that led to the founder and executive chairman’s resignation on Monday, begs the question over whether skeptics are right and that these three ares do indicate an overheated stock market.
The battery-electric and hydrogen-powered truck maker has attracted much fanfare since going public on June 4 through a reverse merger with special purpose acquisition company VectoIQ. The apparent success of Nikola’s debut — as evidenced by investors rushing into the stock and bidding shares higher — kicked off a wave of announcements from electric vehicle start-ups that they, too, planned to go public through mergers with special purpose acquisition companies.
A few days after Nikola began trading shares soared to an all-time high of $93.99, for a gain of more than 170%. At one point Nikola had a market capitalization above Ford’s, despite the fact that the electric vehicle maker said it would not generate revenue until 2021. The stock topped the charts on Robinhood, the trading app popular with millennial retail investors.
The company’s verbose founder and one-time executive chairman Trevor Milton frequently took to Twitter to tout both the company’s progress and promises. And there has been notable progress towards the company’s vision of transitioning away from fossil fuels: in August Nikola announced that it will provide at least 2,500 all-electric refuse trucks for Republic Services, and earlier in September GM said it was taking an 11% stake in the company, which some on the Street said validated Nikola’s business model.
But things began to unravel on Sept. 10 when short-selling firm Hindenburg Research released a report accusing the company of making false statements about its technology. The findings have, in short order, reportedly kicked off investigations from the SEC and DOJ, and led to Milton announcing on Monday that he would voluntarily step aside from the company.
Shares of Nikola plunged more than 22% during early trading on Monday, and traded around $26.40, a price not seen since May before the merger was complete.
Nikola pushed back on Hindenburg’s claims and the SEC routinely looks into companies, meaning an investigation is not necessarily a sign of wrong doing. Amid the turmoil JPMorgan reiterated its buy rating on the stock on Monday saying Nikola’s new chairman, Stephen Girsky, who is a former vice chairman of General Motors and a member of Nikola’s board, may be a “better fit for [the] execution phase.”
But the current rout of Nikola’s shares shines a spotlight on the potential dangers of SPACs and electric vehicle companies, as well as the role of retail investors in the market.
SPACs
Special purpose acquisition companies are on track for a record year amid market enthusiasm for these investment vehicles, which are also known as blank-check companies since investors hand over money without knowing when, or even what for, their capital will be used.
A number of high-profile investors are leading the charge, including Pershing Square’s Bill Ackman and Starboard Value’s Jeffrey Smith. Former House Speaker Paul Ryan has also launched a SPAC, as has Oakland A’s executive Billy Beane of “Moneyball” fame.
On Friday, filings with the Securities and Exchange Commission showed that three SPACs backed by Chamath Palihapitiya are looking to raise $2 billion.
U.S.-listed blank check companies have already raised $38.6 billion this year, which is a 270% jump from 2019's total, according to data from Refinitiv.
The surge in SPACs comes amid heightened market volatility in the wake of the coronavirus pandemic. For the company the SPAC is targeting, it’s a way to go public on an often accelerated timeline, and without having to jump through all of the SEC’s regulatory hoops.
SPACs have traditionally had a somewhat mixed reputation on the Street since the terms can tilt in favor of the sponsor, and they can also be risky given the unknown end target.
“While we are certain that some would disagree with us, we also get a bit worried when the issuance of SPACs surge,” Tobias Levkovich, Citi’s chief U.S. equity strategist, said in a recent note. “We fully understand the opportunistic nature of such fund raises, but we get concerned about giving people blank checks on deals that may or may not be done successfully in the future. ...There is a speculative element here (even with strong sponsors and good managers),” he added.
With a new SPAC seemingly announced daily, former Trump economic adviser Gary Cohn — who himself has launched a SPAC — told CNBC that not all of them are going to “make it over the finish line.”
Electric Vehicles
The attention that Nikola got when it entered the public market, which kicked off a number of other electric vehicle start-ups seeking the same route, has led to calls that there are now simply too many players.
Speculation around electric vehicle companies is nothing new, of course. Tesla is perhaps the poster child — the company and its founder Elon Musk have fervent support on one side, with vocal doubters on the other side. While the stock has experienced some recent weakness, it’s still up more than 400% this year. Wall Street analysts frequently cite the company’s valuation as indication that it trades on emotion rather than fundamentals.
Still, on the heels of Tesla’s success this year and Nikola’s attention-attracting public debut, electric vehicle start-ups have rushed to take advantage of enthusiasm in the market. China-based Nio, which is a Tesla competitor, has seen its stock surge more than 380% this year, while shares of EV company Workhorse Group, which focuses on last mile delivery, have skyrocketed more than 900%.
To name a few of the coming EV/SPAC deals: Spartan Energy Acquisition and Fisker, DiamondPeak and Lordstown Motors, Canoo and Hennessy Capital Acquisition Corp IV, as well as Tortoise Acquisition Corp. and Hyliion.
These companies all have bold visions for what the future of mobility will look like. But it remains to be seen whether they can execute on these promises. Tesla in July posted its fourth straight quarter of profits, but it took the company a decade to reach that milestone. The company’s production and delivery issues in the past demonstrate the difficulties in bringing new vehicles and untested technology to the market.
Retail investors
Retail investors were among those to pile into shares of Nikola around the debut, according to data from now defunct Robintrack.
The accessibility and ease of trading apps like Robinhood have led many to speculate that wild swings in speculative stocks including Nikola, Kodak, and Virgin Galactic, among others, are fueled by novice retail investors.
Nikola’s average volume over the last 10 trading days has come in at 53.2 million shares, though it has only about 361 million shares outstanding.
Individual investors have also been said to be behind the trading frenzy that pushed the Nasdaq Composite to a record high mere months after the coronavirus pandemic sent stocks tumbling.
Japan’s SoftBank has since been identified as reportedly driving much of the action through hefty bets on stock options, but there’s no question retail investors also played a role in the comeback from the March lows.
Trading apps like Robinhood have made the public market more accessible to novice investors, but heavy losses have also been reported on the platform from those who might not understand the intricacies of the market.
In June, CNBC’s Jim Cramer warned that Wall Street professionals could take advantage of amateur investors by bidding up shares of companies that were popular at the time on the app.
“It’s a game. If it weren’t securities, let’s say it was Monopoly, let’s say it’s DraftKings ... it would be so much fun,” he said on “Squawk Box.” “Pick a couple of stocks, you gun them in the morning, and then you hope people are stupid enough and they buy them.”
- CNBC’s Yun Li contributed reporting.
cnbc.com |
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| To: Glenn Petersen who wrote (129) | 9/21/2020 4:47:14 PM | | From: kidl | | | | | Remaining NKLA bulls seem to largely hang their hats based on the GM deal which imho is a huge mistake. The structure of this deal shields GM from any financial downside while providing sizeable upside if NKLA succeeds. GM’s only real downside is a loss in management / BOD credibility if NKLA fails. |
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| From: Julius Wong | 9/21/2020 4:48:56 PM | | | | | | Nikola details terms of Milton's split from the board
Nikola (NASDAQ: NKLA) updates in a SEC filing on the terms associated with the exit of Trevor Milton from his executive chairman position at the company.
"Milton voluntarily stepped down from his position as Executive Chairman of the Company and all positions as an employee and officer of the Company and its subsidiaries, and his position as a director on the Board and as a director of any of the Company’s subsidiaries, including all committees thereof, in each case, effective as of September 20, 2020. Mr. Milton will be making himself reasonably available to provide consulting services and to assist the Company as reasonably requested by the Board on an ad hoc basis through December 31, 2020."
"Milton expressed his desire to relinquish, and pursuant to the Agreement, Mr. Milton agreed to relinquish 100% of the 4,859,000 performance-based stock units granted to Mr. Milton on August 21."
Milton also agreed to certain standstill provisions and said he would vote his shares with the board recommendations for director slots.
Shares of Nikola are down 3.95% AH to $26.49 after a 19.33% drop during the regular session. Volume on Nikola was over 86M today vs. the normal daily average of about 24.9M.
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