NKLA - Nikola Corporation

Nikola has $840M in cash. They have 19M in debt. Throw in 25m in assets and their intrinsic value comes to $846M.

From there, we can divide by the 391M shares and we come up with $2.16 of value, right now.

The market values Nikola at 5.8B.

If you purchased Nikola shares at market, right now, and the company did well enough to increase their intrinsic value by 7 times, you would break even from an intrinsic value point of view. If Nikola goes bankrupt, as seems to be the most likely outcome, you will get back 14 cents on the dollar, minus whatever they can siphon out before common shareholders are paid out.

Oddly, that doesn't sound that bad in this puffed up balloon market.

If ever I were tempted to buy some put contracts....

 

Yes good analysis with Nikola.

Here's an interesting article.

Commercial Truck Electrification is Within Reach

New cost and performance analysis by Berkeley Lab argues that policies are needed to spur widespread adoption of electric long-haul trucks

https://newscenter.lbl.gov/2021/03/16/commercial-truck-electrification-is-within-reach/

 

I'm glad to hear the SEC investigation into Trevor Milton is still active.

Given the extreme fraud Milton perpetrated on his investors, it would be a gut punch to honesty if they were to not bother investigating him after investigating Elon for all kinds of nonsense. To be fair, "420. Funding secured." was not nonsense and deserved a response but "Definitely not a pusher" was snake oil, the likes of which we haven't seen since the days of Enron.

 

Meanwhile, Nikola's internal review found Trevor Milton made "incomplete or inaccurate statements".

Imagine the guys building the Nikola One protoype. They towed a rolling chassis to a photo-op, pushed it down hill, and listened to Trevor Milton say, "It's not a pusher." to a gathered crowd at a press event.

These sort of lies do happen in business and they tear a company apart. Good people leave. Incompetent people keep their head down and do as little as possible. It's a death spiral. It is extremely difficult for a good business to weather these sort of people in management.

"inaccurate" makes it sound like Trevor Milton was confused or lacking knowledge. Trevor Milton presented a bold faced lie to trick and mislead investors about the state of their technology and development.

They might as well write that Nazism was less equitable across ethnicities than other philosophies of the early 20th century.

 

$NKLA shares gain more than 20% after hydrogen fueling collaboration. I missed my chance to buy weekly put at the top.

Nikola Corp. shares rose Thursday after the company said it would work with TravelCenters of America Inc. to install hydrogen fueling stations for heavy-duty trucks at TA-Petro sites.
The companies said they would initially install the fueling stations at two existing TA-Petro sites. They said the collaboration is a first step to "explore the mutual development of a nationwide network of hydrogen fueling stations."
At 11:26 a.m. ET , shares of Nikola Corp. were trading 20% higher, at $12.34 . Volume at the time topped 36.5 million shares, above the stock's 65-day average volume of some 12.8 million.
At 11:27 a.m. ET , TravelCenters of America shares had risen 5.14% to trade at $26.61 .
Write to Stephen Nakrosis at [email protected]

(END) Dow Jones Newswires
04-22-21 1136ET
Copyright (c) 2021 Dow Jones & Company, Inc.

 

$NKLA 20% in 3 days

The company announced yesterday it will team up with TravelCenters of America, to collaborate on the installation of hydrogen fuelling stations for heavy-duty trucks at two existing TA-Petro sites.

Trading between $11.51-$12.68, the stock has a HOLD rating but already at a 131% volume increase (18.26M compared to 65-day ave of 13.89M), with an average target price of $20.86.

https://zyne.com/stock/NKLA

 

RT quote: NKLA $12.14

The fact that Nikola still has 4.77B of market cap tells me the market is not rational.

There have been times I've considered holding options, and I've even done it a couple of times with Tesla, but it is crystal clear the market could care less about value. Retail trading has turned the stock market into a casino. At least, part of it.

 

In the interest of posting content about Nikola, as opposed to a rant, I will mention the AZ factory has a pair of medium size buildings that are, perhaps, 75% complete.

Work has been slow but constant, for the last few months. This site now appears to be a real piece of work and not a scam, like it appeared in the beginning. To be fair, it's not unusual for projects to stall at the outset due to financing, permits, etc.

There is also a rumor that a piece of production equipment has shown up on the build site. The device is said to be a rotisserie to flip chassis over during production.

I value Nikola at roughly $70M. That puts my target price at $0.17.

 

Here is a bit more detail, in case anyone cares about the business behind the numbers flashing beside NKLA.


I wish to express attribution to Bear's Workshop YouTube channel. He is an excellent resource on Nikola and Lucid.

https://www.youtube.com/channel/UCFu8aWIBE8JXMnsYzthpTDQ


Here are the Nikola site plans. It is divided into four phases: red, blue, green, yellow. We are on the first phase, red.






Here is a fly-over from a few days ago. You can see the general assembly and first phase of "battery packing" are perhaps 75% complete. Please understand, I am assessing the structures and facilities, not the manufacturing equipment and process.

Again, this pic is from Bear's Workshop. Anyone interested in Nikola is recommended to check out his excellent YouTube channel.

 

If a couple of pole barns is all they end up being able to show for 2.5B of IPO funding, That will be a full on scam.

These aren't small buildings but this also is not GigaFactory. Meanwhile, Lucid has built the hell out of a factory that looks very close to completion and I seem to recall Lucid started construction after Nikola?

 

I wonder if investors understand the cost and value involved with business operations?

200,000 sq * ft of pole barn can be built for perhaps $1.5M, including HVAC. If these are custom and high spec, perhaps $5M? Electrical service will cost a bit to get to the site; perhaps another $1M. Road construction in the desert isn't all that expensive, maybe $400K. Water and sewer... unknown but they are very close to Phoenix so can't be too bad.

We are probably looking at $10M of construction.

The land cost them $23M.

Nikola raised $2.5B. Maybe retail investors don't realize that is $2500M.

They don't have a lot to show for the $2.5B of IPO fundraising.

Proponents point to a fuel cell truck with 500M range and Nikola's world beating fuel cell technology but Nikola is buying a lot of fuel cell technology from Bosch. I don't see a lot of value being developed by Nikola.

Nikola is developing a heavy haul truck platform. That has some value. I estimate $25M?

Nikola also has the development of refuelling infrastructure in their mission statement. They have plans to build two stations, one in CA and one in AZ, but I believe they don't currently have a refuelling station. Cost for each station is projected to be $17M each.

Again, $2.5B. Where did it go?

Not only is retail OK with $2.5B, they think a correct valuation of Nikola's future value is $4.75B. That is optimism, my friends.

What happens when Nikola runs out of money and needs to raise capital? What if they go bankrupt?

How much is the factory going to be worth? Maybe $15~20M?

How much is the technology going to be worth? All of Nikola's patents are for heavy truck running gear and three for a gearbox design. Gotta say, nobody needs these and I doubt anyone wants them.

Is anyone going to want the truck platform? I cannot imagine anyone wanting this.

So, the value of Nikola hard assets is maybe $20M. The gamble on the is company is beyond my comprehension.