Nikola stock extends selloff, but J.P. Morgan said GM partnership still likely

/ / News

Shares of Nikola Corp. fell 1.2% in premarket trading Monday, even as J.P. Morgan analyst Paul Coster reiterated his overweight rating on the electric vehicle maker as he tried to assuage concerns that a partnership with General Motors Co. could fall apart. Nikola’s stock had tumbled 16.1% on Friday, after Nikola Chief Executive Mark Russell reportedly indicated that the company could manage if GM decides to walk away from the deal, but would cancel plans to produce the Badger truck. Coster said he believes Nikola and GM are still likely to enter a strategic partnership by Dec. 3. “Nikola needs access to GM’s supply-chain, engineering resource, the Ultium battery and Hydrotec fuel cells to de-risk the Class 8 truck initiative,” Coster wrote in a note to clients. “GM needs to realize a return on billions of dollars of investment in Hydrogen fuel cells, and Nikola might be the best available option.” Nikola’s stock has tumbled 60.0% over the past three months through Friday, while the S&P 500 has gained 8.0%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.