Although September started off as a great month for electric truck start-up Nikola, it hardly ended that way. Following revelations alleging fraud and deception brought forth in a short-seller report from Hindenburg Research, Nikola founder and now ex-CEO Trevor Milton resigned from the company and ex-General Motors vice chairman and Nikola board member Steve Girsky assumed the position.
That was not enough to calm market worries over the future of Nikola, a publicly-traded company, and in particular its just-announced $2 billion agreement with GM. That deal called for the Detroit automaker to assume an 11 percent stake in Nikola in exchange for engineering, homologating, and ultimately building the Nikola Badger electric pickup truck.
GM promised in no way would this project get in the way of its own upcoming all-electric truck, the GMC Hummer. While some analysts have been encouraging GM to back out of the deal, that doesn’t appear to be happening. Late last week, we reported GM wants to renegotiate all or part of that deal, and no additional details have come to light. According to CNBC’s Phil LeBeau, GM could be inking out a new deal that’ll see it take an even bigger stake in Nikola.
“Don’t be surprised” if it happens, LeBeau said. LeBeau did not specifically state where this information was coming from, but so far neither automaker has denied nor confirmed it. Shares of Nikola surged by 15 percent upon this report. GM shares increased by 2 percent.
For now, talks between the two continue but there’s no immediate rush to finalize a deal. Nikola’s filing with the Securities and Exchange Commission claims both companies have until December 3, 2020 to come to an agreement. If that deadline isn’t met, then both sides can terminate the agreement completely.
Meanwhile, Nikola has confirmed it is postponing a December event where it planned to show the Badger in the flesh along with other unnamed vehicles.