Shares of electric vehicle startup Nikola Corporation (NASDAQ: NKLA) fell 7% in the after-hours session on Tuesday after CEO Mark Russell withheld from throwing light on the future of a billion deal with General Motors (NYSE: GM).
What Happened: In a CNBC interview with “Mad Money” host Jim Cramer, Russell declined to comment on GM’s $2 billion deal as the discussions were ongoing. Russell clarified that Nikola is still interested in GM’s hydrotec fuel cell system.
The GM deal was anticipated to close by Sep. 30 but two days after the deal was announced, short seller Hindenburg Research accused Nikola of fraud to jack up the stock price, leading to founder and Executive Chairman Trevor Milton’s exit.
Why It Matters: If the GM deal is not finalized by Dec. 3, either side can walk away.
Russell didn’t comment on what Milton would do with 91.6 million shares when the lock-up period ends by Dec. 1. Milton is Nikola’s largest single shareholder.
“We believe that as we execute on our milestones and on our business plan, we’re going to reward our long-term focus shareholders. That’s our focus, is on the long-term,” Russell said.
The Nikola CEO also added that the EV maker would raise money in one more tranche in 2021 and it has roughly $900 million in cash, which is sufficient to run their operations even without the GM deal.
When Cramer requested Russell for some kind of reassurance, as a partnership with GM gives Nikola validity, Russell declined yet again without providing any indication.
Price Action: NKLA shares fell 7.13% to $32.04 in the after-hours session Tuesday, after gaining 17.3% in the regular trading session.