(Bloomberg) — Nikola Corp. shares came within a few cents of erasing all of their gains since the electric-vehicle startup went public last year, a sign investors are souring on its prospects after a series of snafus.
The stock closed down 9.5% at $10.63 in New York trading Thursday amid a broader slump in EV stocks. That’s the lowest in a year and approaching the $10 level at which VectoIQ Acquisition Corp., the special-purpose acquisition company that acquired Nikola, debuted in June 2018.
Many private investors in Nikola — including Fidelity, P. Schoenfeld Asset Management LP and ValueAct — bought into the company at the $10-a-share price before it went public in a so-called private investment in public equity, or PIPE. That means those investors, if they still hold their original shares, aren’t far from falling into the red.
It marks a significant comedown for the once-high-flying stock, which climbed above $90 a share in June and temporarily vaulted Nikola’s market capitalization above that of 117-year-old rival Ford Motor Co.
Nikola representatives didn’t immediately respond to a request for comment.
Nikola has been plagued by a string of negative headlines this year. In March, its strategic partner Hanwha Group signaled an intention to liquidate half of its holdings, and in February, Nikola lowered the projected output of its first commercial zero-emission vehicles and said it might seek to raise more capital. This followed an internal probe that found it made several inaccurate statements.
Read more: Nikola Founder Exaggerated the Capability of His Debut Truck
Peer Lordstown Motors Corp.’s shares fell below the crucial $10 level on Thursday, the price at which the blank-check company it merged with debuted in April 2019. The electric-truck startup last month received an inquiry on its operations from the Securities and Exchange Commission, after short-seller Hindenburg published a report on the company.
Stocks of EV startups like Nikola, which have yet to prove their viability as revenue-generating, profitable entities, have taken a beating this year, as the market soured on high-multiple, risky investments amid a rise in Treasury yields. Competition from legacy automakers such as General Motors Co., Ford and Volkswagen AG also has weighed on the group.
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