Short Selling

Nikola rages forward with a possible Short Squeeze in sight

Nikola Corp (NKLA: US)’s work centers around developing energy solutions in the transport industry. It aids in producing trucks running on electric energy, and electric batteries. When compared, Nikola presently ranks at the eighth spot on the list of largest electric companies according to Market Cap. NKLA’s M Cap is currently standing at $3.49 billion and the company is listed on NASDAQ. Like another EV-manufacturing giant, Tesla Inc (TSLA: US), Nikola too was named after Nikola Tesla, the Siberian-American physicist who is remembered for his work in the field of electric power.

Short Interest

As of August 9, 2022, Nikola stock’s loan volume is at approximately 21.52%. Since January 20 this year, the stock’s utilization rate has been a full 100%, barely budging from May 30 to April 6, when its value only reached as low as 96.86%. The total number of shares on loan was 107,438,248 according to the August 9 statistics. The only sale this year by an Insider at the company was on January 18, by Pablo M. Koziner for 50,579 shares at a value of $9.89 per share. 

Presently, NKLA is valued at $6.96 per share, having declined by 31.74% year-to-date. However, in the past month, Nikola’s stock has gone against the tide and fluctuated by 35.99%.

Acquisition & Earnings

Positive news for Nikola was actually good news for the whole EV industry. Introduced this year, the Inflation Reduction Act of 2022 also included raised tax credits for electric cars and vehicles. The Act was passed in the Senate and will most likely bode good time ahead for the industry. 

On August 1, Nikola announced its talks with Romeo Power to acquire the latter company. Founded in 2014, Romeo Power has been a manufacturer of lithium ion batteries to supply them for Electric Vehicle production. This acquisition follows what is a long partnership between the two companies. Romeo Power’s Chairman, Robert Mancini described Nikola as “Romeo’s largest customer” and a “cornerstone of our development and growth”. Since the date of this announcement, Nikola’s stock price rose giving an increase of 19.97% in just five days.

Three days later, the company brought forward its earnings and financial statistics for Q2 of 2022. During the period, Nikola manufactured 50 of its Tre BEVs and looks to raise the number to 500 maximum by the end of 2022. The total revenues for the quarter were $18,134,000. 

Even if the short sellers betting against the stock do not budge, Nikola stock might see a turnaround thanks to the above factors. Alas, after a few days of price climbing upwards, the stock suddenly fell by 10.65%, closing at $6.96 on August 9. The stock doesn’t look to be leaving bearish territory soon but as a manufacturer, Nikola is raging ahead as well. 

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