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Luke Kawa

Nikola, once worth more than Ford, craters after filing for bankruptcy

The short, scandal-ridden tale of electric and hydrogen-powered vehicle maker Nikola is ending at Chapter 11.

The company was worth about $100 million on the heels of a 40% gain in the opening session of the week. Shares have since gotten hammered in early trading on Wednesday.

In its bankruptcy filings, management estimated that the company had between $500 million and $1 billion in assets versus $1 billion to $10 billion in liabilities.

On June 9, 2020, the market value of upstart EV maker peaked at nearly $29 billion, just a few days after it began trading on the Nasdaq via a SPAC. Over the course of that month, its market capitalization exceeded that of long-established automotive giant Ford. But just like its prototype, “Nikola One,” the stock has been powerless and sliding downhill ever since. In the meantime, its founder, Trevor Milton, was convicted of fraud related to statements he made about that vehicle’s development as well as the company’s supposed battery business.

Shares had been in the doldrums for years ahead of this filing, prompting management to deliver a massive reverse stock split in a bid to keep its share price above $1 and stay listed on the Nasdaq.

Nikola joins Fisker, Canoo, and Lordstown Motors on the list of EV companies that went public via a SPAC and filed for bankruptcy less than five years later.

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Luke Kawa, Nia Warfield
5h
S&P 500’s losing streak extends to three

The longest run in the red for the benchmark US stock index in over a month.

Bears awaken from hibernation at the zoo in Thale
markets
Luke Kawa

Retail traders are dumping Bloom Energy after near 300% rally, says JPMorgan

Retail traders are swarming for the exits in fuel cell company Bloom Energy, causing what was once a near 300% year-to-date rally to sour.

JPMorgan strategists led by Arun Jain flagged that Bloom’s net imbalance — the balance of buying versus selling among retail traders — was exceptionally negative as of 11 a.m. ET, even worse than during its double-digit drop on Wednesday.

JPM retail BE

The fuel cell company, which counts Oracle among its customers, eclipsed a market cap in excess of $20 billion earlier this week despite generating less than $2 billion in sales over the past year.

Wall Street began to sound some alarm bells about the extent of Bloom’s run this week, with Jefferies downgrading its rating for the stock to “underperform” from “hold” on Wednesday while Bank of America analysts wrote, “We are still not buying into BE’s AI hype.”

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Investors are growing bullish on weed stocks. But why?

We spoke to ATB Capital Markets analyst Frederico Gomes about why institutional investors are growing bullish on cannabis.

J. Edward Moreno9h
markets
Matt Phillips

Duolingo rises as executives talk up China opportunity

Duolingo posted a solid gain Thursday, the latest in a series of relatively light-on-news moves in the stock this month as it has regained some attention among options-trading retail investors.

There was a story in China’s official China Daily where executives laid out their plans for the language-learning app’s push into the People’s Republic, which has been a focus of Wall Street analysts on recent post-earnings conference calls.

China, where the company began doing business in 2018, is Duolingo’s fastest-growing market for its language-learning app. It’s also the largest source of test takers for its Duolingo English Test proficiency exam business, a recent focus for management spotlighted in its recent Duocon product announcements.

It’s hard to say if the China Daily story is the reason for today’s upswing in the stock, but given the necessities of working within a country controlled by the Chinese Communist Party, a relatively favorable story appearing in its international propaganda organ suggests a relatively healthy working relationship is developing there.

Duolingo to expand local team, products

Duolingo to expand local team, products

China, where the company began doing business in 2018, is Duolingo’s fastest-growing market for its language-learning app. It’s also the largest source of test takers for its Duolingo English Test proficiency exam business, a recent focus for management spotlighted in its recent Duocon product announcements.

It’s hard to say if the China Daily story is the reason for today’s upswing in the stock, but given the necessities of working within a country controlled by the Chinese Communist Party, a relatively favorable story appearing in its international propaganda organ suggests a relatively healthy working relationship is developing there.

markets
Matt Phillips

Oklo dives after insider sale

Oklo dove Thursday after an SEC filing showed company director Michael Klein sold some $6.7 million in stock in transactions that, importantly, were not part of a pre-set insider sales plan.

Wall Street analysts forecast that the nuclear power startup will make losses for years to come. But the company’s ties to OpenAI CEO Sam Altman, who served as Oklo’s chairman until April, have helped make the stock a favorite of retail traders and a popular momentum play.

Even after today’s stumble, it’s up more than 400% this year and nearly 1,300% over the past 12 months.

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