Nikola’s Stock Selloff Accelerates as Shares Fall Below $10

(Bloomberg) -- Nikola Corp. shares fell Tuesday to the lowest since December 2018, accelerating a selloff that has now erased all their gains since the electric-vehicle startup went public via blank-check company last year.

The electric-truck maker -- once briefly more valuable than Ford Motor Co. -- closed down 6.2% at $9.65 in New York, bringing it below the $10 level at which VectoIQ Acquisition Corp., the special-purpose acquisition company that acquired Nikola, debuted in June 2018.

Nikola’s shares have lost their luster after much fanfare since it closed its reverse merger with VectoIQ in June 2020. That month, it rallied to an intraday high of $93.99, catapulting Nikola’s market capitalization above $28 billion. The company’s valuation has since slumped to $3.8 billion.

Since then, it has been mired in bad news: a collapsed deal to build trucks with General Motors Co., an internal probe that found it made several inaccurate statements, and an inability to meet initial production guidance for its first commercial zero-emission vehicles.

Read more: Nikola Faces Daunting Future With Far Fewer Friends Than Before

Nikola’s slump is also part of broader weakness for electric-vehicle stocks this year as the threat of competition from incumbent players increased and rapid economic growth fueled a rotation into value stocks. Now traditional automakers are making a comeback as they vow to rapidly expand their presence in the EV market, shrinking the potential market share of startups like Nikola.

Last week, shares of another electric truck startup, Lordstown Motors Corp., also fell below the $10 level, the price at which the blank-check company it merged with debuted in April 2019.

Shares of the big three Detroit automakers have rallied this year on aggressive plans to compete in the EV market. General Motors, Ford, and Stellantis NV -- the owner of Chrysler -- all announced plans to shift into EV technology during the March quarter, joining a growing list of peers including Volkswagen AG and BMW AG in trying to convince investors they too offer exposure to the industry.

For many of Nikola’s private early investors -- including Fidelity and P. Schoenfeld Asset Management LP -- the slump could mean they’ve suffered losses if they’ve held onto shares. The ValueAct Spring fund, which was another early investor in Nikola, moved to Inclusive Capital Partners in the summer of 2020. The Spring Fund was led by Jeff Ubben, who remains invested in Nikola though Inclusive.

(Updates stock move in second and third paragraphs, investor details in eighth.)

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