If you needed any confirmation that the speculative fervor ignited by trillions of dollars of money printing and government handouts has gone to extremes not seen since the height of the dotcom bubble, look no further than Nikola. Nikola is an electric truck startup with no revenue that now has a market value greater than Ford Motor company. The WSJ has the story.
The market value of Nikola Corp., NKLA -8.03% a little-known electric-truck startup that went public last week, has surged past that of Ford F -4.14% Motor Co. and other car companies in recent days, as investors continue to bet on the growth potential of electric transportation.
Shares of Nikola, which is developing commercial and passenger vehicles using batteries and hydrogen fuel-cell technology, have more than doubled since they began trading publicly on Thursday.
The startup’s market capitalization eclipsed $30 billion in intraday trading Tuesday, higher than Ford’s value of about $28.8 billion and Fiat Chrysler Automobiles FCAU -2.60% NV of about $20.5 billion.
Phoenix-based Nikola, which hasn’t yet sold any vehicles, has targeted the commercial trucking sector, where companies like Amazon.com Inc. AMZN +2.44% and United Parcel Service Inc. have pledged to reduce the carbon footprint of their logistics operations. The company has also signaled it intends to nose into the pickup market for individual consumers, the most profitable segment of the U.S. car market.
The firm’s surging stock price underscores investors’ preference for electric-vehicle upstarts over traditional auto makers. Shares of Tesla Inc. and China’s NIO Inc. have more than doubled this year, while shares of General Motors Co. and Ford have been hammered amid factory shutdowns from the pandemic. It also illustrates that Wall Street’s enthusiasm for electric cars and other future technologies remains strong, even as businesses more broadly face new pressures stemming from the recent economic fallout.
Nikola has said it has over $10 billion in preorders from commercial clients including brewer Anheuser-Busch InBev SA and expects to begin generating revenue next year with deliveries of a battery-powered semi truck for shorter-haul deliveries.
Nikola’s stock began trading on Thursday, a day after it completed a merger with VectoIQ Acquisition Corp., a publicly traded acquisition company run by former General Motors Co. executive Steve Girsky. The deal left the new entity with an implied value of about $3.3 billion. Shares finished trading last week around $35, a market capitalization of about $13 billion.
The stock rallied Monday, after Nikola executive chairman Trevor Milton tweeted Sunday night that the company would begin taking reservations for a consumer-oriented pickup truck called the Badger on June 29.
The Badger, which the company has said will be powered by both an electric battery and hydrogen fuel-cell technology, hadn’t been seen as a priority for the company and was unlikely to be built without a strategic partnership with an established manufacturer, the company said in corporate filings in May.
But Mr. Milton changed his tune Sunday, saying the company would reveal a fully operational prototype at a company event in the next few months.
Read more here.