- Nikola reversed intraday lows and recovered as much as 15% Wednesday after JPMorgan defended the company following a discussion with Nikola’s management.
- “The overall message was reassuring: no loss of momentum with existing partners, prospects, suppliers and employees,” Paul Coster, an analyst at JPMorgan, said in a statement Wednesday.
- Nikola has been ping-ponging back and forth in the past week after a short selling report helped deflate stock earnings associated with its $ 2 billion partnership with General Motors.
- “Never a dull moment with this title,”
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“Never a dull moment with this kick.”
That’s what JPMorgan analyst Paul Coster said about Nikola in a statement Wednesday following a discussion with the electric vehicle company’s chief financial officer Kim Brady.
Over the past week, Nikola’s title has been on a roller coaster. Shares rose more than 50% following the announcement of a $ 2 billion partnership with General Motors, but those gains quickly evaporated after short seller Hindenburg Research accused the company of fraud and deception.
From there, both Hindenburg and Nikola contacted the SEC, and it has since been revealed that both the SEC and the DOJ have been investigating Hindenburg’s claims about Nikola.
Nikola shares rallied on Wednesday after falling as low as 8% and rose 15% from the intraday low following the JPMorgan note.
“The overall message was reassuring: no loss of momentum with existing partners, potential customers, suppliers and employees,” Coster said.
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Brady told Coster that some of the issues surrounding the short seller report are events leading up to Nikola’s SPAC merger earlier this year and some leading up to the company’s founding in 2014.
Additionally, Nikola’s manufacturing partners such as Bosch have “conducted extensive due diligence on the company,” the note reads.
Brady told JPMorgan he expects tougher messages in the future and has not confirmed or denied that regulators are investigating the company. “[Brady] he seemed a little frustrated with how things are being reported in the media at the moment, ”Coster said.
Finally, in reference to a director’s comment of Nikola that the company went public too soon, Brady disagrees, saying Nikola doesn’t regret making public when he did because he helped the company enable the execution, according to the note.
JPMorgan continues to rate Nikola as “overweight” with a price target of $ 45, which represents a potential 37% upside since Tuesday’s close.
Nikola’s stock was up 15% from its intraday low of $ 30.25 in trading on Wednesday and was up 5% for the day.
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