Finance News

Nikola shares rise as much as 31% after administration confirms manufacturing targets

Badger pickup from the Nikola Motor Company

Source: Nikola Motor Company

Nikola shares rose Thursday, the day after the company announced that the production schedule and factory plans were staying on track amid widespread investor concern about the company's business as well as the proposed deal with General Motors.

The stock rose as much as 31% at one point in the day before finally closing up 17.7%. But the jump does little to contain the stock's recent weakness. Stocks are down 37% over the past month.

Short-selling firm Hindenburg Research accused the company of fraud in a damning report released last month. The results reportedly sparked investigations by the Securities and Exchange Commission and the Department of Justice, and ultimately led to the departure of founder and former CEO Trevor Milton from the company.

Hindenburg's claims sparked doubts among investors that Nikola's previously announced deal with GM would come to fruition.

The deal is still ongoing, although it was originally scheduled to be closed before last Wednesday. However, according to Mark Russell, Nikola CEO, the two companies remain under discussion. The partnership would give the Detroit automaker an 11% stake in the company for the supply of Nikola battery and fuel cell technologies and for the manufacture of Nikolas Badger pickups.

The potential partnership is also weighed down by sexual abuse allegations against Milton, which CNBC reported on Monday. Two women have made formal charges against the founder, filing complaints against the 38-year-old billionaire of sexual abuse with the Utah authorities when both women were 15 years old.

Through a spokesman, Milton strongly "denied" what he called false allegations and declined to go into the specific details of the women's complaints. Milton and Nikola have also denied the fraud allegations in Hindenburg's report.

– CNBC's Michael Wayland contributed to this report.

Subscribe to CNBC PRO for exclusive insights and analysis as well as live business day programs from around the world.

Related Articles