Nikola’s share price fell 16% on Friday as investors worried that General Motors might decide not to take part in the launch of the truck.
CEO Mark Russell exacerbated concerns on Thursday, telling Bloomberg that the crippled company has a “master plan” to move forward if GM abandons a deal announced last month.
“The [markets are] reading this as a hedge, ”said Dan Ives, an analyst at Wedbush Securities. “Right or wrong, now I think all eyes are on whether Nicholas will ink this?”
Nicholas, along with founder Trevor Milton, has been haunted for weeks by allegations of fraud in a short seller report released two days after GM said it would take an 1
While Nicola and GM have until December 3 to complete the deal, negotiations between the two companies were expected to end in late September. Mr Russell told the Financial Times that the talks were “ongoing”, but declined to comment further.
After the allegations of the short sellers came to light, the partnership between GM and Nicola was the subject of speculation that the Detroit-based carmaker could try to renegotiate the terms of the deal or withdraw altogether.
Mr Milton denied any fraud and the company offered a rebuttal, which gave some points to the report. Mr. Milton left the company last month.
Since then, company executives have been trying to shift the focus to Nikola’s business model: developing semi-trucks with hydrogen fuel cells along with a system of car charging stations.
In an interview with the Financial Times, Mr. Russell called Badger “an interesting and exciting project for some shareholders, but our institutional shareholders are mostly focused on the business plan.”
Mr Russell’s comments on Badger contrasted with his remarks to businessman John Shegerian about his Impact! podcast. The interview, published on September 15, appears to have been recorded on September 9, the day after the announcement of the GM and the day before short selling vendor Hindenburg Research published its report.
“We now believe we have a legitimate chance to be a significant manufacturer of cordless electric vehicles in the commercial vehicle truck space and now in the passenger car space with our Badger pickup,” he said.
People went crazy over Badger after Mr Milton tweeted about it, Mr Russell added, and about 90,000 enthusiasts signed up to receive updates on the truck’s progress. Reservations to purchase the car start at $ 100 and increase to $ 5,000 for VIP treatment.
“We think we can take you Badger in 2022,” he told the host. “For $ 100, we’ll put you on the list.”