4 ms·

GM was also taken in. Either GM corporate is insanely inept or the scam was at least somewhat credible. I am not judging the retail investors too harshly on thi

GM was also taken in. Either GM corporate is insanely inept or the scam was at least somewhat credible. I am not judging the retail investors too harshly on this as credible organizations gave it a thumbs up too.

throwaway0a5e 6y ago
From GM's perspective they stood to lose nothing and potentially gain. It didn't matter if the guy was running a scam, might as well give him a shot in case he pulls it off since the buy in is so low (some tech they didn't care about). Oh "what about their reputation" you say? The only people who will know or care about this already have their driveways filled with Model 3s and 4runners and turn up their nose at GM. The real buyers don't care. The big banks, the suppliers, the big corporate entities GM has to deal with don't care either since this doesn't affect GM's perceived trustworthiness to d business with.
- MattGaiser 6y ago
  But they still committed engineering and corporate resources, even if just to do planning and run estimates. I get that it is not a lot in the grand scheme of things for them, but it went quite far if the scam was so obvious. Or can I get a meeting with GM with an animator and mockups?
  - csours 6y ago
    > "Or can I get a meeting with GM with an animator and mockups?" Yes, that and a $34b market cap.
  - zaptheimpaler 6y ago
    Nikola is still worth $10B on the market, after today's crash. GM got an 11% stake. i.e they just made $1B, atleast. Probably much more. Yes that's worth a couple of pointless meetings and work for GM.
    - zwily 6y ago
      The deal is off. GM got no stake, AIUI.
    - jariel 6y ago
      No, GM called off the deal, even if they got some amount, they'd never be able to liquidate, the selloff would crash NKLA instantly. It's going to go down eventually. I don't think HNers here are grasping how bad it is for a respectable multinational like GM to get taken in a major deal like this, it's bad.
- jariel 6y ago
  "From GM's perspective they stood to lose nothing and potentially gain. " No, investing 2 Billion in a scam essentially ruins the credibility of many people and puts the CEO in jeopardy. Being stupid has consequences, even if you can back out. "The big banks, the suppliers, the big corporate entities GM has to deal with don't care " Of course they care - you think that the suppliers of GM who give GM massive credit want to know that the company is doing something this dumb and could end up in Chapter 11 - again - where they lose their money? There is no positive spin on this for GM it makes them look like idiots - to the point wherein the CEO should definitely be fired because this is not just 'some deal' it's an existential issue concerning their future.
  - 55555 6y ago
    You don't understand the structure of the deal. GM risks nothing and has upside.
    - jariel 6y ago
      I understand the structure of the deal - you're not understanding credibility, power and money. Doing a $2B deal with a company that turned out to be hot air / fraud is inexcusable, total incompetence - it doesn't matter how well leveraged GM was ostensibly, or how de-risked they were. If it was a 'side show' M&A project, the CEO could write it off, but it's not - EV's are 'the core' part of the future of automakers and they are scrambling to put a strategy in place. Everyone involved in this fiasco to go, they need someone in place who can put the EV roadmap in place. There was ample evidence that NKLA was a mess, and GM bit anyhow. This deal should be a be 'Tesla Buy' signal, because it validates Musks' view that regular automakers are stupid. And just gasp at how badly markets are out of whack - a $10B company that has no money, a string of failures, they've produced nothing for the investment, shenanigans with investors bailing out etc.. In reality NKLA is probably worth some large negative value.
      - 55555 6y ago
        I see your point.

throwaway0a5e 6y ago

From GM's perspective they stood to lose nothing and potentially gain. It didn't matter if the guy was running a scam, might as well give him a shot in case he pulls it off since the buy in is so low (some tech they didn't care about). Oh "what about their reputation" you say? The only people who will know or care about this already have their driveways filled with Model 3s and 4runners and turn up their nose at GM. The real buyers don't care. The big banks, the suppliers, the big corporate entities GM has to deal with don't care either since this doesn't affect GM's perceived trustworthiness to d business with.

MattGaiser 6y ago
But they still committed engineering and corporate resources, even if just to do planning and run estimates. I get that it is not a lot in the grand scheme of things for them, but it went quite far if the scam was so obvious. Or can I get a meeting with GM with an animator and mockups?
- csours 6y ago
  > "Or can I get a meeting with GM with an animator and mockups?" Yes, that and a $34b market cap.
- zaptheimpaler 6y ago
  Nikola is still worth $10B on the market, after today's crash. GM got an 11% stake. i.e they just made $1B, atleast. Probably much more. Yes that's worth a couple of pointless meetings and work for GM.
  - zwily 6y ago
    The deal is off. GM got no stake, AIUI.
  - jariel 6y ago
    No, GM called off the deal, even if they got some amount, they'd never be able to liquidate, the selloff would crash NKLA instantly. It's going to go down eventually. I don't think HNers here are grasping how bad it is for a respectable multinational like GM to get taken in a major deal like this, it's bad.
jariel 6y ago
"From GM's perspective they stood to lose nothing and potentially gain. " No, investing 2 Billion in a scam essentially ruins the credibility of many people and puts the CEO in jeopardy. Being stupid has consequences, even if you can back out. "The big banks, the suppliers, the big corporate entities GM has to deal with don't care " Of course they care - you think that the suppliers of GM who give GM massive credit want to know that the company is doing something this dumb and could end up in Chapter 11 - again - where they lose their money? There is no positive spin on this for GM it makes them look like idiots - to the point wherein the CEO should definitely be fired because this is not just 'some deal' it's an existential issue concerning their future.
- 55555 6y ago
  You don't understand the structure of the deal. GM risks nothing and has upside.
  - jariel 6y ago
    I understand the structure of the deal - you're not understanding credibility, power and money. Doing a $2B deal with a company that turned out to be hot air / fraud is inexcusable, total incompetence - it doesn't matter how well leveraged GM was ostensibly, or how de-risked they were. If it was a 'side show' M&A project, the CEO could write it off, but it's not - EV's are 'the core' part of the future of automakers and they are scrambling to put a strategy in place. Everyone involved in this fiasco to go, they need someone in place who can put the EV roadmap in place. There was ample evidence that NKLA was a mess, and GM bit anyhow. This deal should be a be 'Tesla Buy' signal, because it validates Musks' view that regular automakers are stupid. And just gasp at how badly markets are out of whack - a $10B company that has no money, a string of failures, they've produced nothing for the investment, shenanigans with investors bailing out etc.. In reality NKLA is probably worth some large negative value.
    - 55555 6y ago
      I see your point.