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>The Badger pickup partnership seems relatively safe for GM. At least the traditional electric one. >At the very least they are getting an aesthetically pleasi

by desdiv 6y ago

>The Badger pickup partnership seems relatively safe for GM. At least the traditional electric one. >At the very least they are getting an aesthetically pleasing exterior design and a ready email list of potential buyers. Is a pickup truck exterior design and a customer list worth the 3 billion in market cap that GM lost since the news broke? GM may not take a monetary damage from dealing with Nikola, but they will still suffer a reputation damage. If and when Nikola folds, GM's management will be seen as hilariously incompetent for not doing the proper due diligence, and the market will price that in accordingly.

sokoloff 6y ago
> Is a pickup truck exterior design and a customer list worth the 3 billion in market cap that GM lost since the news broke? GM closed last week at $30.00. GM closed this week at $30.46. In between those two times, the $NKLA deal was announced on Tuesday and GM shot up a bit. Then Hindenburg published and GM sank to only a small gain on the week. You can’t have GM take the $3B W on the $NKLA news and then complain about the $3B loss that is paired with it when the details are better understood. If a company approached you and offered to give you $2B in shares, $0.7B in capex, and a book of cost-plus orders that uses your technology, how much due diligence is required/appropriate? “GM takes $2B stake in $NKLA” usually means they brought money to the table. In this case, it literally means they were given it and agreed to take it.
- ogre_codes 6y ago
  I was wondering about the terms of this deal. GM agreeing to provide vehicles to Nikola is a no-brainer. Taking on a stake in the Nikola was the big question mark in my mind. If Nikola gave them the shares, maybe the goal was to give GM a reason to keep Nikola solvent? Now GM has something to lose if Nikola tanks so they might be willing to invest some amount of money or repetitional capital to keep them afloat? Or maybe giving the GM stake was just another smoke and mirrors bit on Nikola's part so they could claim a high profile "investor".

by desdiv 6y ago

sokoloff 6y ago

> Is a pickup truck exterior design and a customer list worth the 3 billion in market cap that GM lost since the news broke? GM closed last week at $30.00. GM closed this week at $30.46. In between those two times, the $NKLA deal was announced on Tuesday and GM shot up a bit. Then Hindenburg published and GM sank to only a small gain on the week. You can’t have GM take the $3B W on the $NKLA news and then complain about the $3B loss that is paired with it when the details are better understood. If a company approached you and offered to give you $2B in shares, $0.7B in capex, and a book of cost-plus orders that uses your technology, how much due diligence is required/appropriate? “GM takes $2B stake in $NKLA” usually means they brought money to the table. In this case, it literally means they were given it and agreed to take it.

ogre_codes 6y ago
I was wondering about the terms of this deal. GM agreeing to provide vehicles to Nikola is a no-brainer. Taking on a stake in the Nikola was the big question mark in my mind. If Nikola gave them the shares, maybe the goal was to give GM a reason to keep Nikola solvent? Now GM has something to lose if Nikola tanks so they might be willing to invest some amount of money or repetitional capital to keep them afloat? Or maybe giving the GM stake was just another smoke and mirrors bit on Nikola's part so they could claim a high profile "investor".