Why GM is said to consider boosting its stake in Nikola


General Motors is considering revisions to its deal with embattled Nikola Corp., according to people familiar with the discussions, and may seek a higher stake in the startup now that its valuation has fallen after allegations of deception.

GM tentatively agreed to take an 11 percent stake in Nikola as part of a cash-free deal made public last month. The Detroit automaker would supply hydrogen fuel-cell technology to its junior partner and manufacture a new battery-powered pickup for it called the Badger. Talks to finalize the agreement are ongoing ahead of a Dec. 3 deadline.

Since the deal was announced on Sept. 8, Nikola stock has fallen by more than half and GM has sought better terms before closing, said the people, who asked not to be identified because the discussions are private. GM could push to raise its equity in Nikola beyond the planned 11 percent or seek warrants that would guarantee or even increase that level of ownership if the company raises more money.

GM’s due diligence on the startup has been questioned after a short seller accused Nikola of overstating its capabilities and know-how. The allegations — and federal regulatory probes into those claims — sent the Phoenix-based company’s stock price into a downward spiral. Nikola has denied the allegations against it and Trevor Milton, the company’s founder and former chairman.

Shares of Nikola were up 4.5 percent to $25.19 in morning trading Friday.

Latest Posts

Iran accuses Israel of sabotaging Natanz nuclear facility

On the 12th, the Iranian government accused...

320 doses of COVID-19 vaccine have been stolen from a hospital in India

The COVID-19 epidemic in India has become...

DIY Tips to Repair Your Car Scratches

It is inevitable for cars to be...

British Improves Legislation to Accelerate Autonomous Driving Technology Development

According to a report jointly issued by...