JPMorgan ‘skeptical’ about GM producing Nikola badger pickup

Nicola Motor Company

: Nicola Motor Company

Regarding Nicola, JP Morgan is “finalizing” a deal with General Motors to produce an electric pickup truck called the Badger for embattled vehicle start-ups.

Instead, JPM analyst Paul Coster expected the two companies to resume a previously announced $ 2 billion deal without Badger over supplying GM with its big commercial trucks – battery and fuel cell technologies Was focused.

“(Nicola’s) CEO, in our view, has been consistently non-committal about the Badger initiative, and we suspect that it will go further that this is not a strategic initiative for Nicola and that it is the class of cash needed for the company. Can finish. 8 truck initiative, “Coster said in an investor note on Wednesday.

During an interview on CNBC’s “Mad Money with Jim Cramer” on Tuesday, Nicola CEO Mark Russell said that negotiations with GM were ongoing. He said the company remains “interested” in the automaker’s technologies, but reiterated that Nicola would not sell the Badger – a consumer vehicle compared with the Semitrex – without a partner for its production.

“It’s a business case,” Russell said. “It makes sense for our shareholders that something is capable of happening. And we’ve got a partner. It’s not in our original plan. If you look at our main plan, it’s about heavy trucks and hydrogen. Is in… ”That’s why we said from the beginning that it takes a partner. Therefore, we have a partner, it is in the game. If we have no partner, it is not. “

A GM spokesperson declined to comment in a conversation on Wednesday that “the transaction has not closed, and there is no new information to report”.

Coster said JPM has “the sense that both GM and Nicola have reason to reorganize the deal. Nicola Badger may want to abandon the partnership, GM may want more stock to compensate for less . ” If not finalized on 3 December, a paved road can be built from both sides.

Nikola shares traded down 17.4% during trading on Wednesday morning. About noon, they rebounded slightly, down 11.2% to $ 30.65 per share.

The September 3 deal was initially seen as a losing position for GM. The partnership will give Detroit automakers an 11% stake in the company to supply battery and fuel cell technologies as well as Nikola to produce Badger pickups.

Two days after the announcement, short-seller Hindenburg Research accused founder and former chairman Trevor Milton of issuing an inaccurate report for partnering with investors and other automakers for making false statements about the company’s technology. It portrayed Nicola as “a hoax created on dozens of lies” by Milton, who dismissed several claims before resigning in September.

The report has led to inquiries by the Justice Department and the Securities and Exchange Commission.

– Michael Bloom of CNBC contributed to this report.

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