Nikola surges 21% after the company is referenced on GM's website amid ongoing deal talks
- Nikola surged as much as 21% on Wednesday as investors searched for clues that a deal between General Motors and the electric-vehicle start up had been finalized.
- Mention of Nikola on General Motor's website was widely circulated on Wednesday, but the webpage notes that the transaction between the two companies "has not yet closed."
- General Motors CEO Mary Barra said earlier this month talks remain ongoing with Nikola after a previously announced deal was put on hold following a short-seller report that alleged fraud at the electric truck company.
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Investors in Nikola are scouring the internet in search of clues that a previously announced $2 billion manufacturing deal with General Motors will go through.
That deal, announced in September, was put on hold following a report from Hindenburg Research that alleged Nikola and its co-founder Trevor Milton committed fraud and deceived investors.
Founder Trevor Milton voluntarily stepped down from the company as chairman following the report, even as the company dismissed many of Hindenburg's claims.
Now, there's a fast approaching December 3 deadline for the potential partnership deal between General Motors and Nikola to close.
On Wednesday, a page on General Motors website that mentioned the announcement of its partnership with Nikola was widely circulated among investors, potentially causing confusion that a deal may have been reached.
That is not yet the case. Still, shares of Nikola traded up as much as 21% in Wednesday trades.
The webpage in question, which outlines General Motors' commitment to an electric future, says:
"We signed an agreement with Nikola to engineer and manufacture the Nikola Badger using our Ultium battery system, and to be the exclusive supplier of Hydrotec fuel cells globally for Nikola's Class 7/8 semi-trucks, except in Europe. The transaction has not yet closed."
An October 5 screenshot of the same webpage in question from the Internet Archive lists the same excerpt above, without mention of the last sentence, "The transaction has not yet closed."
It appears investors may have not finished reading the entire excerpt before placing an order to buy shares of Nikola on Wednesday.
General Motors CEO Mary Barra had told Bloomberg in early November that talks between the two companies were ongoing.
If a deal doesn't materialize with GM, Nikola CEO Mark Russell said last month, the company will move on and blaze its own path as it refocuses on developing and manufacturing its semi-trucks.
He also signaled that the company would abandon its Badger pick-up truck ambitions if the manufacturing partnership with GM falls apart.
