(Benzinga) – Nikola Corporation shares — which have retreated notably off their early June highs of $93.99 amid short seller allegations of flawed fundamentals and the subsequent resignation of founder Trevor Milton — were staging a mini-rally Wednesday.
What Happened: The electric truck developer’s shares were reacting to comments by General Motors Company President Mark Reuss in an interview with CNBC, keeping alive hopes of a partnership between the automakers.
GM and Nikola announced a deal in early September under which the former would help engineer and build the latter’s hydrogen-electric pickup truck Badger.
The deal, however was not consummated by the anticipated closure date of Sept. 30, which put further pressure on Nikola stock.
Rekindling the deal hopes, Reuss told CNBC that GM continues to “work the opportunity” of its $2-billion deal with Nikola, although it hasn’t been finalized yet.
“The opportunity to put our fuel cells into a class 7 and 8 vehicle is spectacular. We know there’s great operational cost advantages there, there’s great efficiencies and there’s great opportunities,” the GM exec told CNBC.
Why It Matters: A GM deal, if it materializes, could vindicate Nikola, which has been criticized by short sellers.
The $2-billion equity stake GM offered would provide financing to Nikola in a capital-intensive industry.
As a consequence, the beaten-down stock could take off.
NKLA Price Action: At last check, Nikola shares were rallying 10.88% to $22.98.