Shares of Nikola Corp. (NKLA) tumbled 9.3% in premarket trading Thursday, after Wedbush analyst Dan Ives turned bearish on the electric truck maker, saying he now believes the downside risks outweigh any positives. He cut his rating to underperform from neutral, and slashed his stock price target to $15, which is 29% below Wednesday's closing price of $21.15, from $45. The downgrade follows a volatile few weeks, that included a landmark partnership ( ) announced with General Motors Co. (GM), a short-seller report ( ) and the sudden resignation of Founder Trevor Milton ( ) as executive chairman. In a note titled, "The Light has Turned From Yellow to Red," Ives said he still believes Nikola's EV and hydrogen fuel cell ambitions are attainable in the semi-truck market, he now has "serious concerns" that the execution and timing of these goals can stay on track in the coming years. "The recent questions surrounding the Nikola story raised by the bears will be a dark cloud over the stock until answered, especially with no fundamental or delivery catalysts in the near term," Ives wrote in the note. "[N]ikola has made no revenue over the last 4 years, burns cash at a rapid rate, and has some stout competition already off and running in the electric trucking space (Tesla, Daimler)," he added. The stock has still more than doubled year to date through Wednesday, but it has plunged 71.5% over the past three months while Tesla Inc.'s stock (TSLA) has run up 97.9% and the S&P 500 has gained 6.1%.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
September 24, 2020 06:36 ET (10:36 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.