Editor’s Note: Updates with Nikola shares closing nearly 26% lower
Nikola Corp. (NASDAQ: NKLA) promised investors it would name a co-developer for its hydrogen fueling stations by the end of the year. Talks have stalled because of a short seller report attacking the integrity of the company’s founder, The Wall Street Journal reported Wednesday.
The Journal report kept pressure on Nikola’s stock price. Shares closed down 25.82%, or $7.36, at $21.15 on Wednesday. They have plummeted from their intraday high of $93.99 on June 8, a few days after going public in a reverse merger.
Concluding the search for a station partner is one of three commitments Nikola made in April before the company went public.
Nikola made good on the other pledges: On Aug. 10,, Republic Services (NYSE: RSG) ordered 2,500 battery-electric refuse trucks. Nikola announced an agreement Sept. 8 with General Motors Co. (NYSE: GM) to manufacture the Badger electric pickup truck. GM also would take an 11% stake in the company.
Talks ‘with several potential partners’
Citing “people familiar with the matter” the Journal reported that talks with “several potential partners, including BP PLC (NYSE: BP Plc), stalled. Short seller Hindenburg Research alleged in a Sept. 10 report that founder Trevor Milton misled investors about Nikola’s technology.
The setback is the first outward indication that the controversy around the report is impacting the startup’s ability to execute its business plan, the Journal said.
Nikola Chief Financial Officer Kim Brady said during a virtual chat with Evercore ISI analysts on Tuesday that “nothing has changed” in the company’s business plan following Milton’s sudden resignation as executive chairman. His departure was first reported by FreightWaves on Sunday night.
Search for a partner continues
Nikola CEO Mark Russell told analysts from Morgan Stanley last week that the search for a hydrogen station partner continues. He laid out criteria Nikola is seeking in a partner. Russell specifically mentioned access to electricity.
Power to make hydrogen through splitting water into hydrogen and oxygen accounts for as much as 85% of the station cost, Brady said.
Potential partners have been reluctant to move forward amid the heightened scrutiny, but a deal could still come together, the Journal reported.
“Nikola doesn’t comment on rumors or speculation,” a spokeswoman told FreightWaves. BP also declined comment.
Short seller Hindenburg claims ‘a big win’
In a separate story Wednesday profiling Hindenburg Research founder Nathan Anderson, the Journal said Anderson told the newspaper that betting Nikola shares would decline in value based on its report has been “a big win.” He declined to say how much money his five-person firm has made from the trades.
“We are short and still are short,” Anderson told the Journal.