Market Overview

'Very Capable' Team Vetted Nikola Ahead Of $2B Deal, GM CEO Says

Share:
'Very Capable' Team Vetted Nikola Ahead Of $2B Deal, GM CEO Says

After a short seller targeted Nikola Corporation (NASDAQ: NKLA) over alleged deception, the electric car maker received a show of support from General Motors Company (NYSE: GM).

What Happened: General Motors CEO Mary Barra, during a conference with RBC Capital Markets on Monday, claimed that the company conducted "appropriate diligence" when entering into a $2 billion partnership with Nikola, CNBC reported.

“The company has worked with a lot of different partners and we’re a very capable team that has done the appropriate diligence,” Barra said, according to CNBC.

Why Does It Matter: General Motors and Nikola announced on Sept. 8 they were entering into a $2 billion 10-year partnership, where the former would engineer and manufacture Nikola’s pickup truck Badger.

Short seller Hindenburg Research in a report Wednesday alleged that Nikola is deceiving investors and claimed misrepresentation on the part of the electric vehicle company.

As a part of the $2 billion agreement, GM received an 11% stake in Nikola. However, the short seller's report suggested that the deal was a result of analyst and shareholder pressure after Wall Street’s EV stock buying frenzy.

The United States Securities and Exchange Commission is probing the Hindenburg allegations against Nikola, according to a Bloomberg report late Monday.

Price Movement: Nikola shares slumped 8.13% at $32.88 in the after-hours session Monday, after a 11.39% uptick during regular hours.

GM stock marginally declined to $30.92 per share in the after-hours.

Photo courtesy: Nikola Corp.

 

Related Articles (GM + NKLA)

View Comments and Join the Discussion!

Posted-In: automakers electric vehicles EVs Hindenburg Research Mary BarraShort Sellers Tech Media Best of Benzinga