Tesla competitor Nikola is doomed to fall 40% in a month, a famed short-seller says
- Nikola has been on a tear since it went public last week — the electric-truck maker's stock doubled in one day as investors, hungry for another Tesla-like stock to invest in, piled into it.
- At one point, Nikola, which has yet to sell a single car or generate revenue, saw its market valuation surpass car giants such as Ford and Fiat Chrysler that sell millions of cars every year.
- The short-seller Andrew Left of Citron Research said this week that the party's over and that he expects Nikola to fall by 40%, to $40, over the next month.
- "The anti-Tesla If you buy here you deserve to lose your $$ considering Milton sold just a week ago at $10," Left tweeted on Tuesday.
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Nikola, a Tesla competitor, has been on a tear since it went public last week, with its stock more than doubling in one day.
But don't expect that run to last long, the famed short-seller Andrew Left of Citron Research said this week.
With the electric-truck maker's market valuation briefly surpassing car giants such as Ford and Fiat Chrysler — though it hasn't sold a single car — Left said investors deserved to lose money if they bought its stock at current levels.
"$NKLA back to $40 in a month," Left tweeted on Tuesday. "The anti-Tesla If you buy here you deserve to lose your $$ considering Milton sold just a week ago at $10. When $TSLA had this mkt cap the Model S was scaled and X was produced. There is no real IP at $NKLA and PR's have been overly promo."
Nikola shares traded at $65 as of Wednesday's close, so a drop to $40 would represent a decline of 40%.
Left pointed to the progress Tesla had made when it sported Nikola's market cap years ago: Tesla had scaled production of the Model S and was starting to produce its Model X crossover SUV.
Meanwhile, Nikola has yet to produce or sell a single car and doesn't expect to generate any revenue until 2021. Left chalked up Nikola's meteoric rise to the company's overpromotion to retail investors.
Nikola is already 30% off its 52-week high of $93.99. The decline could be attributed to short-term traders taking profits, as well as to Tesla recently telling employees it plans to scale up production of its Semi truck that it revealed in late 2017.
Nikola, which plans to sell an electric semitruck dubbed the Badger, has said it has potential revenue of $10 billion from preorders from customers like Anheuser-Busch. The Badger is designed to directly compete with Ford's F-150.
Left also pointed to Nikola CEO Trevor Milton's sale of shares at $10, suggesting that Milton might think the stock is overvalued.
Nikola shares traded down 15%, at $55.10, early Thursday.
