Nikola Slides After CEO Doesn't Confirm $2 Billion GM Deal

Nikola shares drop after CEO Mark Russell fails to reassure investors that the company’s $2 billion pact with General Motors will still go through.
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Nikola  (NKLA) - Get Report shares fell Wednesday after the company’s recently minted CEO failed to reassure investors that the electric truck maker's $2 billion pact with General Motors  (GM) - Get Report will still go through.

Speaking with TheStreet's Jim Cramer on his CNBC “Mad Money” show, Nikola CEO Mark Russell said discussions with GM about supplying fuel cell and battery technologies as well as an all-electric pickup are ongoing, though stopped short of confirming the deal that would see GM take an 11% stake in Nikola.

“Both of those things are interesting to us,” Russell said. “We continue to talk to them about those things.” If a deal isn’t finalized by Dec. 3, either side can walk away.

New York-based Hindenburg Research in September released a research report calling Nikola an "intricate fraud" and outlining what it said were instances of the company allegedly misrepresenting its technology and its progress toward developing its trucks.

The bombshell report came just two days after Nikola's deal with GM was announced.

The Hindenburg report and confirmation of a Securities and Exchange probe into Nikola prompted founder and Executive Chairman Trevor Milton to abruptly step down from the company in late September.

Milton holds 91.6 million shares that he is free to sell after the lock-up period ends on Dec. 1. Milton is Nikola's largest single shareholder. 

“Can’t comment for Trevor, of course,” Russell said. “But we believe that as we execute on our milestones and on our business plan, we’re going to reward our long-term focus shareholders. That’s our focus, is on the long-term.”

Russell also told Cramer that Nikola would raise money in one more tranche in 2021 and that the company has roughly $900 million in cash, which he said is sufficient to run the company's operations even without the GM deal. 

Shares of Nikola were down 12.13% at $30.32 in trading on Wednesday.