GM Pulls out of Deal With Nikola Corporation
Nikola's shares fell 27% yesterday
Francis Scialabba
• less than 3 min read
Shares of Nikola fell nearly 27% yesterday after GM announced it was pulling out of a deal to take an 11% equity stake in the electric truck company.
The backstory: GM gave Nikola a stamp of approval in early September with a $2 billion investment to co-develop Nikola's all-electric Badger pickup trucks. It stood by that agreement even as a short seller alleged that Nikola and former CEO Trevor Milton were misleading investors and committing an "intricate fraud."
The nowstory: GM and Nikola are entering into a non-binding "potential agreement" that scraps the equity stake and Badger trucks. It does leave GM the option to supply fuel-cells for Nikola's commercial semi-trucks...if it feels like it.
Bottom line: The new arrangement gives GM some breathing room should Nikola fully crash and burn, but it doesn't fully sever its relationship with a one-time EV darling.
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