Nikola (NASDAQ: NKLAInvestors were able to suspend payment earlier this week as shares recovered in the second quarter 2020 earnings announcement. However, the expected announcement turned out to be a dud at various levels, as the company no longer revealed key details , which caused a huge drop in the share price. To illustrate: Nikola shares were down more than 10 percent in yesterday’s after-hours trading. Today, as of 9:21 a.m. EDT, the stock is still down more than 12 percent.
Regardless of the mess that Nikola shares are currently going through, Deutsche Bank appears to double its rosy outlook for the company. For refreshment, the bank will have one on August 3 short-term bullish call for Nikola for her winnings. Deutsche analyst Emmanuel Rosner noted that Nikola can use his first profit call to announce an OEM partner for the Badger electric pick-up and update the current status of Badger’s reservations. However, neither of these two long-awaited revelations came about during the profit call. Apparently, this lack of material updates did not deter Deutsche. To illustrate: the bank made another bullish call today, noting Which:
“Nikola’s short-term set-up remains favorable after the company’s second quarter results.”
Given the current price action ahead of the market, it appears that investors are out to ignore the bank’s latest bullish call.
It should be noted that Nikola reported a cash balance of $ 698 million and a revenue of $ 30,000 for the second quarter of 2020. It also revealed an adjusted EBITDA loss of $ 46.98 million and an adjusted earnings per share of – $ 0.16. Nikola also incurred one-time costs of $ 51.5 million during the period as a result of the merger between Nikola Motors and VectoIQ.
Nevertheless, the company has provided some updates. For example, it signed a purchase order with Nel for electrolysis equipment that can produce up to 40,000 kg of hydrogen per day. In addition, during the earnings call, Nikola revealed that the estimated R&D costs for the whole of 2020 will be between $ 190 million and $ 200 million, while the CAPEX in H2 2020 is likely to exceed $ 100 million. Crucially, the company announced that formal production of Nikola Tre will begin at its Ulm, Germany, facility in the fourth quarter of 2021. Regarding the upcoming facility in Arizona, Nikola unveiled the first phase of its 1 million square foot manufacturing facility will be completed in Q4 2021, with phase 2 entering the consumption phase 12 to 18 months after that. In addition, phase 3 will be completed in 2023. Finally, Nikola revealed that the FCEV version of its product offering will not go into production until 2023.
In a positive development, the executive chairman of Nikola Corporation – Trevor Milton – recently revealed via a tweet that the company’s cash balance would reach $ 940 million by the end of August 2020 as a result of the ongoing cash exercise of warrants. Nikola has already announced that it will repay all remaining unexercised public warrants on August 21, 2020. It is crucial to remember here that private warrants are not currently being repaid.