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NKLA Stock Just Hit a New Low, But Nikola Has Plans to Turn Things Around

Despite several signs of life this year, electric truck company Nikola (NASDAQ:NKLA) is still suffering consequences from last year’s bitter controversy. NKLA stock saw its share value reach an all-time low today after dropping more than 5% yesterday. It appears investors are still hesitant over the troubled EV company despite encouraging recent deals.

Image of NKLA logo on phone screen
Source: Stephanie L Sanchez / Shutterstock.com

So, what’s going on with Nikola today?

It’s difficult to pinpoint the exact reasoning behind NKLA’s drop. One obvious contender is simply investor sentiment. Last year, Nikola came under fire after allegations that it had made several fictitious claims regarding its technological capabilities. Its founder and then Chief Executive Trevor Milton was arrested, and Nikola recently agreed to pay $125 million in fraud charges. It’s a major mark against Nikola and clearly not something a company can simply walk away from unscathed.

Regardless, Nikola has largely persevered. Nikola has made a number of promising deals to start the new year, including letters of intent from several companies interested in buying or leasing its emission-less trucks. Despite this, Nikola’s share price has failed to hold up its end of the bargain. The company is down nearly 6% today, trending around $8.71 at the time of writing, for a more than 37% decline in the past six months.

What other forces are at play for Nikola?

Investors Remain Speculative of NKLA Stock

Nikola is also likely a victim of impending market conditions against the innovative EV company. Treasury yields saw a sizable jump yesterday, projecting concerns related to impending interest rate hikes. This is a sell-sign for many technology and growth stocks, as it functionally means their future earnings will be discounted. EV startup Nikola is a perfect victim of this latest market indicator.

And it’s truly a shame. Nikola’s hot streak of deals continued just yesterday when the company announced a multi-year deal with another EV company, Proterra (NASDAQ:PTRA). Proterra agreed to supply batteries for Nikola’s semi-trucks, with estimates of prototypes to be delivered starting in Q2 of this year. By all counts, this is good news for the company and reflective of its vigor this year.

But alas, investors are demonstrably dismissive of the news. All eyes will be on Nikola ahead of its February quarterly earnings report to see if its comeback really is happening. But until then, it seems fans of the truck maker will have to hold on through the turbulence to see if there are clear skies ahead.

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2022/01/nkla-stock-just-hit-a-new-low-but-nikola-has-plans-to-turn-things-around/.

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