The startup was once valued at $26 billion. Those days are long gone.
There was a time when Nikola was seen as Tesla's biggest rival when the company was valued at $26.3 billion after going public last summer. That's all in the past. Nikola's problems haven't stopped since it was accused of fraud in September by Hindenburg Research, the same short-seller firm that just recently released a similar report alleging Lordstown Motors amplified its pre-order count to deceive investors.
The aftermath of Hindenburg's report saw Nikola founder and chairman Trevor Milton resign, and GM then exited the just-signed $2 billion investment deal that would have seen the Nikola Badger truck, a Tesla Cybertruck rival, enter production. GM has since negotiated a new, far scaled-down agreement that will see it supply fuel-cell systems for Nikola's semi-trucks.
Another deal with garbage removal company Republic Services was also terminated. Reuters now reports Nikola's situation continues to worsen following the departure of its fuel-cell development lead, Jesse Schneider. This comes only weeks after Nikola and Milton admitted they made some partially or completely inaccurate statements prior to September's damning report. Schneider's departure caused Nikola shares to drop 5 percent. Its valuation is currently around $5 billion.
Barron's also has an interesting report stating Milton again sold more than 3.5 million shares in his former company valued at about $48.6 million. Oddly, the deal was done for "goods and services" from the buyer, rather than cash.
Milton still owns 79 million shares of Nikola stock, but his most recent sale is unusual because he basically bartered his shares to a mystery buyer. It's clear Milton isn't completely divorcing himself from Nikola, but his shares, and shares in general, just aren't worth what they once were. Without a series production model like the Badger, Nikola has become a very different company.
To its credit, Nikola just inked a deal to provide sales and service products to RIG300 Service Network, a company that runs heavy-duty truck service and maintenance centers. Hopefully that will keep the company going until a flood of good news comes around.