Nikola collapses after filing for capital increase

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Shares in electric truck maker Nikola Corporation (NKLA) fell 3.75% in extended hours trading on Monday after the company announced, via an SEC filing, that it planned to make a $ 100 million share offer. According to the file, Nikola intends to use the funds raised for general corporate purposes. The company said this could include completing its manufacturing plant in Arizona and expanding its commercial electricity and fuel cell infrastructure and hydrogen stations.

Although the company reported a lower fourth-quarter loss than many analysts had expected (17-cent loss in EPS vs. 24 cents), management disappointed investors by failing to provide further progress on how which she travels to turn electric truck designs into sales. The quarter was also marred by another automaker General Motors Company (DG) unwinding a stake in the company and exiting a partnership to build Nikola’s flagship Badger van.

Until Monday’s close, Nikola’s stock has a market value of $ 6.69 billion and is trading more than 50% higher than last year. However, since the company’s last earnings report on February 25, shares have lost 13.5%.

View of Wall Street

Earlier this month, JPMorgan analyst Paul Coster downgraded Nikola to “Neutral” from “Overweight” and lowered his price target to $ 30 from $ 33. The analyst said he believed much of the good news was already built into the stock, but noted that it could recover again later this year as the first prototype battery-powered electric vehicle. fuel would become a reality.

Other analysts covering the stock want to know more about the company before committing to any upgrades. Currently, it receives one “Buy” rating and six “Hold” ratings. Year-over-year price targets range from a high of $ 47 to $ 17. Meanwhile, Monday’s $ 17.06 close is 49% below the median target price of $ 25.50.

Technical and tactical outlook for trading

Over the past six months, Nikola’s shares have found support at the crucial $ 14 level after steep declines. The recent rebound in this closely watched area also coincides with a crossing of the Moving Average Convergence Divergence (MACD) indicator to generate a buy signal.

Active traders entering here are expected to post profits on an increase in key overhead resistance to $ 29. Consider placing a stop loss order below this month’s swing low at $ 14.05.

To view today’s earnings schedule, check out our earnings schedule.

This item was originally posted on FX Empire

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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