What Happened?
Shares of electric vehicle manufacturer Nikola (NASDAQ:NKLA) fell 21.4% in the afternoon session after rumors swirled about CEO Stephen Girsky's potential departure, fueling fears of an impending bankruptcy. Fred Lambert, editor-in-chief of tech site Electrek, posted on X (formerly Twitter), "the bankruptcy filing is already in the hands of lawyers." As of now, Nikola has not issued an official statement addressing the speculation.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Nikola? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Nikola’s shares are extremely volatile and have had 88 moves greater than 5% over the last year. But moves this big are rare even for Nikola and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 19% on the news that the company reported second quarter earnings. Nikola blew past analysts' revenue expectations. Adjusted EBITDA loss was also better than expected. The company sold (wholesale) 72 hydrogen fuel cell electric vehicles in Q2, exceeding the high-end of previous guidance, which shows demand momentum. Zooming out, while the company still lacks scale and profits, we think this quarter featured some important positives.
Nikola is down 32.1% since the beginning of the year, and at $0.88 per share, it is trading 97.2% below its 52-week high of $31.20 from March 2024. Investors who bought $1,000 worth of Nikola’s shares 5 years ago would now be looking at an investment worth $2.82.
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