New York (CNN Business)Elon Musk and Tesla may have some new competition — in the auto market, on Wall Street and on social media.
Nikola, a company that makes hydrogen fuel cell and battery-powered electric trucks, just went public. Its stock has more than doubled over the past few days. And Nikola’s chairman is bragging about it on Twitter.
Shares of Nikola — the first name of the famous inventor Tesla — are up more than 120% since it completed a merger with an already public shell company named VectoIQ on June 3.
The stock jumped 103% on Monday alone, though it plunged 22% early Tuesday morning in volatile trading along with the broader market before bouncing back. Nikola shares were up nearly 10% by late morning.
Tesla shares, which have also skyrocketed lately to a near record high, were down slightly.
Monday’s meteoric gains came after Nikola founder and executive chairman Trevor Milton issued a series of tweets touting pre-orders for the company’s Badger truck. Shares were up another 27% at the open Tuesday before plummeting.
Nikola began trading under that name last week after its deal with VectoIQ — a special-purpose acquisition company (SPAC) with no assets of its own that was formed purely to merge with a private company seeking to go public. (Richard Branson’s Virgin Galactic (SPCE) and fantasy sports/betting company DraftKings both recently went public this way, too.)
VectoIQ, which changed its name to Nikola and ticker to NKLA last week following the merger, has already soared more than 600% in 2020 — with most of those gains taking place after Nikola announced plans to buy VectoIQ in March.
Nikola, which also makes semi trucks, is now worth about $26 billion based on Monday’s closing price, even though it’s not expected to generate any sales — let alone profits — until 2021.
This makes the company more valuable than Ford (F) and Fiat Chrysler (FCAU) and it is catching up fast to GM (GM) — a fact that Milton boasted about on Twitter on Monday, saying that “‘I’ve wanted to say this my whole adult life; $NKLA is now worth more than Ford and FCA. Nipping on the heels of GM.”
Nikola already has announced sales to big customers, including an 800-truck order from Budweiser brewer Anheuser-Busch InBev (BUD) and a multimillion dollar order with freight shipper US Xpress Enterprises (USX).
The company has also landed some top auto industry talent as it seeks to take on Tesla (TSLA), which plans to launch both an electric semi and its futuristic Cybertruck. Nikola announced last week that former GM vice chairman Stephen Girsky, who had been CEO of VectoIQ, is now on its board.
One of Nikola’s top investors is CNH (CNHI), a global industrial conglomerate that makes tractors, buses and construction equipment. CNH said Monday that its IVECO commercial vehicle subsidiary now owns a 7.1% stake in Nikola.
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