Big moves make for trending stocks, and Nikola (NASDAQ:NKLA) is on the investing community’s radar big-time just three days after Nikola stock started trading on the Nasdaq.
Social-media buzz exploded, replete with #DieselIsDead hashtags and screen-caps of mind-blowing gains as NKLA stock shares doubled in a single trading session. And suddenly, seemingly out of nowhere, Nikola founder Trevor Milton is being touted as the next Elon Musk.
But is hydrogen-fueled-truck-maker Nikola really the next Tesla (NASDAQ:TSLA)? And does Nikola truly have, in Milton’s words, “the most bad ass zero emission truck” available? As always, the answer depends on whom you’re asking, and whether they’re positioned long or short.
Nikola Stock: Priming the Pump
To call NKLA stock’s timeline “accelerated” would be the understatement of the year. Even TSLA stock didn’t generate hype this quickly. But in the age of unicorns and giga-unicorns, everything might not be better, but it certainly is faster.
Let’s back up the truck for a moment, though. First off, Nikola doesn’t just make environmentally friendly trucks. The company also offers sport-utility vehicles and even a “fully-electric sit-down personal watercraft.”
Nokola also fancies itself as an energy company, replete with “Heavy Duty fast-fueling with hydrogen” that’s “standardized to fill in less than 15 minutes, similar to diesel today.”
But let’s not kid ourselves — the market and the social-media pundits are buzzing about the trucks, plain and simple. And admittedly, the Nikola Badger pickup truck, besides being fully electric/hydrogen-fuel-cell-powered, does look pretty awesome.
And for the trucking industry, Nikola offers three semi-truck models: Nikola One, Two and “Tre.” Undoubtedly, these trucks’ futuristic look contributed to the buzz. Generating $10 billion in pre-orders (according to the company) also indubitably contributed to the share-price pump.
A Star Is Born
A reverse merger with VectoIQ Acquisition Corp. allowed the NKLA stock ticker to debut very quickly on the Nasdaq. Charmingly, Milton prepped for the big day with “liquid minerals, Bai, redbull and water” and declared it “the second biggest day of my life” (his wedding took the top spot, thank goodness).
By the close of the first day of trading for NKLA stock, the company had a $12 billion market value. Milton was basically a celebrity at this point, albeit with a less erratic bent than Musk (so far, at least).
And the comparisons with Musk don’t end there as they’re both fabulously wealthy now and brimming with ambition. In Milton’s case, his prime directive isn’t a far cry from Elon’s: “I founded the company to completely disrupt the energy and transportation market,” declared Nikola’s founder.
Not to mention the fact that the apparent inspiration for both companies, if we’re to judge by their respective names, is Nikola Tesla. Thus, comparisons aren’t unjustified — but justifying the eye-popping spike in the NKLA stock price is a different story entirely.
Some say that the stock-price doubling was spurred by Milton’s tweet enjoining would-be customers to pre-order the company’s Badger trucks. “Reservation holders will have first dibs on #nikolaworld2020 tickets. Sign up here to be notified immediately when #nikolabadger reservations open on June 29th,” he instructed.
Hashtags and world-tour aspirations aside, Milton’s flair for self-promotion is evident. Perhaps we do have another Musk in the making here. After all, Tesla’s success was based as much on a cult of personality as it was the vehicles themselves.
Whether the share price can maintain its current trajectory is questionable, though. Trees don’t grow to heaven, as they say, and an initial spurt of hype must give way to gravity (i.e., profit taking) at some point.
Bottom Line on NKLA Stock
Can Milton achieve what Elon did as a hype man and market provocateur? He’s off to a pretty good start, but NKLA’s future path depends, in large part, on whether Milton can keep up the act — and whether the market keeps on buying it.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.