Nikola bids farewell…
Here’s the latest news impacting the electric vehicle maker.
Nikola has been caught up in a major fiasco lately.
As we recently discussed, Nikola has been dealing with some legal issues regarding a slew of fraud allegations. And while the company was thoroughly investigated and mostly cleared, the investigation has clearly impacted the company.
And the biggest loser happens to be Nikola’s founder and chairman, Trevor Milton. It was announced on Monday that the founder voluntarily resigned. This resignation came ten days after short-selling claims came forth, uprooting investor’s confidence in the electric vehicle maker.
Where’s the money?
This resignation led to even more uncertainty for the investors as well, as the stock plunged nearly 30% in premarket trading on Monday. And while Nikola had immediate plans – including adding Stephen Girsky, former vice chairman of General Motors and a member of Nikola’s board, as chairman of the board, effective immediately – investors still piled selling pressure onto the stock.
Now, while Milton has stepped away, he’s nowhere near done. Here’s what the young founder had to say…
“I asked the Board of Directors to let me step aside from my roles as Executive Chairman and a member of Nikola Board of Directors. The focus should be on the company and its world-changing mission, not me. I intend to defend myself against false allegations leveled against me by outside detractors.”
But regardless if Milton “clears his name” – Nikola is still in a tough spot. And it’s going to be one that’s hard for the company to bounce back from – especially as the stock continues to move down. So, while the new low price tag on NKLA might seem attractive – here’s what I think you need to know…
How can I get some?
You know the saying, where there is smoke, there is fire. I think it’s essential to pay attention to the current “smoke” surrounding Nikola. Following Trevor Milton’s defense to the short-sellers, he voluntarily steps down as executive chairman. Weird timing, right?
And while I don’t know the exact explanation for his sudden decision – I do find myself asking, why would a CEO step down if he had nothing to hide?
So, in my brain – smoke meet fire. And there’s no promise that this spiral is anywhere close to being done.
That’s why I won’t be chasing this Nikola “discount.” And I’d advise you shouldn’t either. Instead, I would look to invest in the real winner of the electric vehicle sector – the stock that has remained on top all this time – Tesla (TSLA).
4 MAJOR Exits This Year (Unheard-of 95% Success Rate)
He’s only 34 but already has a net worth over $20 million. By the end of the year, he expects to add another $10 million to that total. He was one of the earliest investors in some of the biggest tech companies on the planet: Spotify… DraftKings… Palantir. And now he’s opening his portfolio of new deals to the public for the very first time. Here are the next six deals he’s investing in…
In the spotlight: A new TikTok development…
Before we headed into the weekend, President Trump announced that he would be removing TikTok from the app store across the U.S. But over the last few days, there’s been a shift in the narrative, and it looks like the social media app is here to stay.
As of now, Trump is looking to push a quick sale of TikTok to Oracle. But times running out as the U.S. Department of Commerce might have pushed back the ban – but only until September 27. And as the companies move to finalize the deal, crucial questions over data security, national interest, and the deal’s structure remain unanswered.
And there’s one big contradiction when it comes to this deal. Beijing-based ByteDance said it would own a majority stake in the new TikTok Global in the U.S., which directly contradicts President Trump’s claims that China has nothing to do with the deal.
Trump explained that with this deal moving forward, it would be a “brand new company.” Oracle would become the secure cloud provider and host American users’ data. But ByteDance insisted that it wouldn’t be losing control of the social media app.
It appears daily that the narrative surrounding TikTok shifts, revealing new information. But one thing stays the same. While I’ll continue to watch this deal’s development, I won’t be basing any investing decisions on this. And as volatility continues to rule the market, I would advise you do the same.