Shares in Nikola Corp (NASDAQ: NKLA) fell 15% on Tuesday, extending its downward trend as some individuals within the company reportedly sold shares in the company the day after General Motors Co. changed its agreement with Nikola.
Basic analysis: Deal changed
Until Tuesday evening, shares of Nikola Corp worth over $1.2 billion were traded on American stock exchanges, in contrast to a daily average of around $1.9 billion in the five previous sessions, as the data from Refinitiv showed.
After GM revised its deal with Nikola, the shares of the zero-emission carmaker were sold on Monday. The first deal between GM and Nikola included an equity stake in the company and plans to manufacture Nikola’s electric pickup truck Badger. GM changed this deal by replacing it with a non-binding agreement under which General Motors will supply its fuel cell system to Nikola.
In the news, the Royal Bank of Canada lowered its target price for Nikola shares by 2 to 17 dollars.
The former chairman of Nikola Corp. Trevor Milton holds the majority of the blocked shares of the truck manufacturer and is obliged to make a notification within 2 working days after a sale of his shares according to the US Securities and Exchange Rules.
The short-seller report broke out several days after General Motors stated that it would help increase production of Nikola’s electric pickup truck Badger and acquire an 11% stake and $700 million, putting the deal under investigation.
Technical analysis: stocks feel depressed
The Nikola share price fell for the fourth consecutive month and the share lock-up period ended on Monday, 180 days after the company’s merger deal with VectoIQ Acquisition and its public debut on the Nasdaq.
Weekly chart of the Nikola share (TradingView)
The shares are now around 34% in the red and close to the May lows. A weekly closing price below $17.66 (the blue line) will open the door for further stock losses.
Nikola Corp. stock fell 15% for the fourth consecutive year after it was revealed that insiders had unloaded stock in the automaker the day after GM revised its deal with Nikola.