Nikola jumps 15% on report GM could take a bigger stake

Nikola founder Trevor Milton
Nikola founder Trevor Milton attends a news conference held to presents its new full-electric and hydrogen fuel-cell battery trucks in partnership with U.S. Nikola, at an event in Turin, Italy, December 3, 2019.

  • Nikola surged 15% on Wednesday after CNBC’s Phil LeBeau reported that investors should not be surprised if General Motors takes a bigger stake in Nikola.
  • General Motors and Nikola announced a partnership earlier this month, in which GM would take an 11% stake in the electric vehicle startup company.
  • But weeks of controversy surrounding Nikola and its founder, Trevor Milton, have put intense scrutiny on the deal between GM and Nikola, which was expected to close today.
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Nikola surged as much as 15% on Wednesday after it was reported by CNBC’s Phil LeBeau, citing sources, that General Motors could take a bigger stake in the electric vehicle start-up than originally planned. 

“Don’t be surprised” if it happens, LeBeau said.

In early September, GM and Nikola announced a $2 billion deal that would see GM take a 11% stake in Nikola, in exchange for design, manufacturing, and production services for Nikola’s Badger pick-up truck. 

That deal, which was expected to officially close today, remains up in the air following weeks of heightened controversy surrounding Nikola and its founder Trevor Milton, thanks in part to a short-seller report from Hindenburg Research.

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Hindenburg alleged that Milton and the company misled and deceived investors with prop vehicles that were not functional.

Since the report, Trevor Milton stepped down from the company as its executive chairman. 

Talks between Nikola and GM continue and a deal won’t be finalized by today’s previously expected closing date, according to CNBC.

General Motors traded up as much as 2% in Wednesday trades.

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