- JP Morgan defended the company after discussions with Nicola management.
- “The overall message was reassuring: no harm with existing partners, prospective customers, suppliers and employees,” JPMorgan analyst Paul Koster said in a note on Wednesday.
- During the past week, Nikola has ping-ponged after a short seller report to help reduce share gains associated with its $ 2 billion partnership with General Motors.
- “Never a dull moment with this stock” Coster said, reiterating his “overweight” rating.
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“Never a dull moment with this stock.”
JPMorgan analyst Paul Coster said on Wednesday about Nicola in a note following a discussion with Kim Brady, the managing CFO of the electric vehicle company.
Over the past week, Nicola Stock has been a rollercoaster. Shares jumped more than 50% after announcing a $ 2 billion remuneration with General Motors, but short-seller Hindenburg Research accused the company of fraud and deception.
From there, Hindenburg and Nicola both approached the SEC, and it is revealed that both the SEC and the DOJ are looking into the claims made by Hindenburg about Nicola.
On Wednesday, shares of Nikola staged a recovery after falling below 8% and a 15% drop from its intraday low following JPMorgan’s note.
“The overall message was reassuring: there is no loss of momentum with existing partners, potential customers, suppliers and employees,” Coster said.
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Brady told Coster that some of the issues associated with the short-seller report are incidents that occurred prior to the SPAC merger of Nicola earlier this year, and some date back to the company’s founding in 2014.
In addition, Nicola’s manufacturing partners such as Bosch have “conducted extensive diligence on the company”, according to the note.
Brady told JP Morgan to expect a strong message, and did not confirm or deny that the regulators were investigating the company. “[Brady] A little disappointed at how things are being told in the media at the moment, ”said Coster.
Finally, in reference to a comment by a Nikola director that the company went public too soon, Brady disagreed, saying that Nikola did not regret it publicly because he did so because the company enabled execution according to the note helped.
JPMorgan continues to “overweight” Nicola with a $ 45 price target, representing a potential gain of 37% from Tuesday’s close.
Nicola shares jumped as much as 15% from their intraday low of $ 30.25 in Wednesday trading, and are up more than 5% for the day.
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