What happened
Investors continue to sue Nikolain (NASDAQ: NKLA) end with Republic Services (NYSE: RSG), and they don’t like what they’re seeing. Electric truck maker shares fell 5.5% on Thursday and fell up to 10% at the start of the session.
And
Nikola’s stock was under pressure on Wednesday after the company said its deal with Republic to develop and manufacture 2,500 garbage collection and recycling trucks had failed. The company was flying high in August when the deal was announced, but in the months that followed, the enthusiasm for the stock collapsed.
Image source: Nikola.
Nikola was the target of a short seller attack accusing the company of overdoing its products and technologies in investor demonstrations. Founder and former executive president Trevor Milton left the company in September and struck a deal with General Motors to obtain much needed technologies has been reduced.
The termination of the agreement with the Republic is only the last disappointment. Loop Capital analyst Jeffrey Kauffman said in a note published on Thursday that the ad was “another setback in a series of setbacks”, while remaining optimistic about Nikola’s long-term prospects.
Kauffman notes that Republic’s business was not incorporated into the company’s guidelines, and management said it expects to announce further customer orders in early 2021. The analyst reiterated his purchase rating on the shares, with a target price of $ 35.
What now
Kauffman’s optimism is understandable, as there is potential for real business contained in Nikola. But a lot has to happen in the coming quarters for the company to become the growth shares that investors envisioned. The stock has dropped more than 80% in the last six months, and with good reason.
For anyone looking to speculate on the potential, Nikola’s shares could function as a small part of a very diverse portfolio. But it is understandable that many investors have decided to stay out after everything that has happened.