Is Nikola Another Theranos?🚚
Is Nikola Another Theranos?
A few days ago we discussed how Nikola’s stock shot up more than 40% after it announced a partnership with General Motors. However, its price has dropped nearly 25% over the past two days due to a report that accuses the company of being an intricate fraud.
The report, which was released by Hindenburg Research, stated that Nikola has made numerous misleading statements and even flat out lied about certain aspects of the company. Both the report and some members of the battery industry say the technology Nikola claims to have does not exist. The report also states that the company hides its use of third-party components in vehicles.
We knew that Nikola was partnering with GM for the legacy car marker’s production capabilities, but we did not know that GM would also be the one providing the fuel cell capabilities for the partnership. Hindenburg claims the only things Nikola is bringing to the partnership are concept designs, their brand name and cash to pay GM for production costs.
If this report is true, this is an important lesson for investors. Don’t always believe statements that seem too good to be true, and do your homework rather than following the herd.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.