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A transportation stock for a new era

VectoIQ is a special-purpose acquisition entity that's been focused on investing in autonomous vehicle technology. But pending approval from shareholders on June 2, 2020, the company will merge with Nikola Motors, change its name to Nikola, and begin trading under the new symbol NKLA.

In anticipation of the tie-up, VectoIQ stock has skyrocketed 100% higher in the last month alone. What's the big deal? Nikola develops battery-electric vehicles (BEVs) and hydrogen fuel-cell electric vehicles (FCEV), and it already has over 14,000 orders for its FCEV semi-trucks. Should all the orders be fulfilled, it would represent some $10 billion in revenue over an expected two-and-a-half year production run. The obvious hope here among investors is that Nikola will emerge alongside Tesla as a future leader in transportation and logistics.

That's where the merger comes in. The transaction will issue new stock and combine proceeds with VectoIQ's cash in trust to raise $525 million. Those funds will be used to begin constructing Nikola's manufacturing facility southeast of Phoenix, Arizona, as well as building out its hydrogen fuel-cell stations to support the fleet of semis it will be making. An early customer for its BEVs and FCEVs is Budweiser parent Anheuser-Busch InBev.

But here's the catch: Should the combination of VectoIQ and Nikola go through (which it certainly seems it will), the new company doesn't expect to start generating revenue until next year. Managing cash burn and progress in delivering orders will be key, but this will be an incredibly volatile and speculative stock until those semis start rolling off the to-be-built assembly line. I'd advise keeping a position, if any, very small in the meantime. That advice holds for all of the stocks mentioned here.

https://www.fool.com/investing/2020/05/24/5-high-growth-smal…
 
aus der Diskussion: Von VTIQ zu NKLA - Der Nikola IPO
Autor (Datum des Eintrages): habnurwenig  (25.05.20 14:23:51)
Beitrag: 376 von 13,946 (ID:63793574)
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