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Nikola is a downright scam. Literally nothing they say makes sense or has any credibility. On one hand they claim magical technical improvements on the other th

by nickik 6y ago

Nikola is a downright scam. Literally nothing they say makes sense or has any credibility. On one hand they claim magical technical improvements on the other they claim to have partners do basically everything. They have not shown credible prototypes of their vehicles. They don't have a factory or locked in partners with a factory. They are essentially a couple 100 people in an office and many of them seem to be in marketing. They couldn't get funding threw venture capital so did the reverse merger thing to be able to be stock traded. That was great for them because their 'we are Tesla but also totally different and much better' routine works with people who don't know the industry.

riffraff 6y ago
Nikola feels scammy as hell, but didn't they announce a partnership to produce their vehicles in Europe with some of the established large producers? (Also they are partially owned by CNH IIRC, so that seems easy to do).
AnthonyMouse 6y ago
If we learned anything from Tesla it's that electric cars are a very "fake it 'till you make it" industry. You have to raise a ton of capital to get off the ground but once you're making a real product, people buy it. But you can't exactly go down to the local credit union and apply for a twenty billion dollar loan. So the only way to build something is to hype the nothing that you currently have in order to get investors to give you a ton of money so you can actually build something. It's like the people confused about Tesla's current share price in the middle of a pandemic. But it's the response to the pandemic which has given them the greatest boon they could have asked for -- very low interest rates. That causes investors to borrow money to invest, which is what's holding up stock prices in general. But on top of that they're selling a product with a higher up-front cost and lower operating costs, so lower interest rates make for lower car payments make for more customers. The company itself still has a lot of outstanding debt which can now be refinanced, and lower interest rates make it cheaper for them to borrow even more to continue expanding. Nikola benefits from a lot of that too, though you can't really gain customers through low interest car loans before you have a product. The issue for Nikola is that "fake it 'till you make it" only works if you eventually make it. If they don't generate enough hype to raise as much capital as they need to actually bring a viable product to market before the bottom falls out, poof.
- llsf 6y ago
  I am wondering if the current Tesla high stock price is also lifted up by short squeeze. Some of the billions of dollars shorting Tesla are giving up, as they do not see a way to make money in the foreseeable future.
  - totalZero 6y ago
    If that were the case then many long holders would sell and the price would revert. Short squeezing has undoubtedly contributed to the volatile rally of TSLA, but the fact that the price remains elevated is presumably due to something more than the price impact of closing shorts. For whatever reason, the market thinks TSLA is worth this price. Personally I think there are many retail traders who don't know too much about the market, get bored of other names, and want to be on the meteoric TSLA bandwagon. When that collapses it will be a sad day for Elon Musk.
    - llsf 6y ago
      When it collapses, it would be a sad day for the retail trader who came late. I would hope Elon Musk is not working at Tesla solely to increase his bank account. It seems that Musk was ready to get Tesla private for $420. It seems like Tesla could lose 3 times its current value and still be above that (in)famous $420. It would then be worth still $78B, which is already a lot (~Volkswagen's valuation). Although one can argue that Tesla is not just a car manufacturer, but how much solar and energy could bring? I am also quite puzzled by the current Tesla valuation...
simonebrunozzi 6y ago
Might be, and I'd agree with you. But who knows? Maybe a big European or Japanese carmaker (many of them have mentioned their desire to pursue H2/fuel cells cars) decides to acquire them to speed up the transition, in which case, even if it's all vaporware, the stock might be worth something.
- skinnymuch 6y ago
  I think only Toyota, VW, and Tesla have market caps over $50B. I know market cap isn’t everything. But still, Nikola appears far too big. Not sure what these car companies could spend, but even $5B seems too much for an investment. Nikola has to drop 4x at least.
  - simonebrunozzi 6y ago
    That's a really good point. Forgot to consider that.
    - skinnymuch 6y ago
      Oops I didn’t add that I looked that info up. Didn’t know it initially. But yeah the contrast of valuations is wild.

by nickik 6y ago

riffraff 6y ago

Nikola feels scammy as hell, but didn't they announce a partnership to produce their vehicles in Europe with some of the established large producers? (Also they are partially owned by CNH IIRC, so that seems easy to do).

AnthonyMouse 6y ago

If we learned anything from Tesla it's that electric cars are a very "fake it 'till you make it" industry. You have to raise a ton of capital to get off the ground but once you're making a real product, people buy it. But you can't exactly go down to the local credit union and apply for a twenty billion dollar loan. So the only way to build something is to hype the nothing that you currently have in order to get investors to give you a ton of money so you can actually build something. It's like the people confused about Tesla's current share price in the middle of a pandemic. But it's the response to the pandemic which has given them the greatest boon they could have asked for -- very low interest rates. That causes investors to borrow money to invest, which is what's holding up stock prices in general. But on top of that they're selling a product with a higher up-front cost and lower operating costs, so lower interest rates make for lower car payments make for more customers. The company itself still has a lot of outstanding debt which can now be refinanced, and lower interest rates make it cheaper for them to borrow even more to continue expanding. Nikola benefits from a lot of that too, though you can't really gain customers through low interest car loans before you have a product. The issue for Nikola is that "fake it 'till you make it" only works if you eventually make it. If they don't generate enough hype to raise as much capital as they need to actually bring a viable product to market before the bottom falls out, poof.

llsf 6y ago
I am wondering if the current Tesla high stock price is also lifted up by short squeeze. Some of the billions of dollars shorting Tesla are giving up, as they do not see a way to make money in the foreseeable future.
- totalZero 6y ago
  If that were the case then many long holders would sell and the price would revert. Short squeezing has undoubtedly contributed to the volatile rally of TSLA, but the fact that the price remains elevated is presumably due to something more than the price impact of closing shorts. For whatever reason, the market thinks TSLA is worth this price. Personally I think there are many retail traders who don't know too much about the market, get bored of other names, and want to be on the meteoric TSLA bandwagon. When that collapses it will be a sad day for Elon Musk.
  - llsf 6y ago
    When it collapses, it would be a sad day for the retail trader who came late. I would hope Elon Musk is not working at Tesla solely to increase his bank account. It seems that Musk was ready to get Tesla private for $420. It seems like Tesla could lose 3 times its current value and still be above that (in)famous $420. It would then be worth still $78B, which is already a lot (~Volkswagen's valuation). Although one can argue that Tesla is not just a car manufacturer, but how much solar and energy could bring? I am also quite puzzled by the current Tesla valuation...

simonebrunozzi 6y ago

Might be, and I'd agree with you. But who knows? Maybe a big European or Japanese carmaker (many of them have mentioned their desire to pursue H2/fuel cells cars) decides to acquire them to speed up the transition, in which case, even if it's all vaporware, the stock might be worth something.

skinnymuch 6y ago
I think only Toyota, VW, and Tesla have market caps over $50B. I know market cap isn’t everything. But still, Nikola appears far too big. Not sure what these car companies could spend, but even $5B seems too much for an investment. Nikola has to drop 4x at least.
- simonebrunozzi 6y ago
  That's a really good point. Forgot to consider that.
  - skinnymuch 6y ago
    Oops I didn’t add that I looked that info up. Didn’t know it initially. But yeah the contrast of valuations is wild.