To The Moon

$Nikola Corporation(NKLA)$

In February 2025, facing insurmountable financial difficulties, Nikola filed for Chapter 11 bankruptcy protection and announced plans to liquidate its assets under court supervision.

Many investors have lost billions of dollars, and that’s no exaggeration. I’ve repeatedly warned people on my channel, practically begging them in multiple article, not to invest in companies like Nikola, Lordstown, Fisker, Lucid, or Rivian. Some might argue that Rivian and Lucid are still operational, which is true, but their stocks have plummeted by over 80%, leaving investors with massive losses.

Over time, I’ve suggested alternatives like BYD, CATL, Tesla, or even Zeekr. Personally, I did lose some money investing in Xpeng, but that company has since turned things around, and its stock price has rebounded strongly.

Now, yet another EV company is facing bankruptcy. Nikola is the latest to join the ranks of Lordstown, Fisker, and several Chinese automakers that have gone under. Canoo has also just declared bankruptcy, and the number of failing EV companies seems to be rising at an alarming rate.

Nikola’s stock has dropped by 95%, and the company is desperately seeking a lifeline—hoping for a buyer or an investor to step in. However, history suggests that’s unlikely. Fisker tried the same approach, begging for a bailout, but nothing materialized. Canoo likely did the same. Nissan is also struggling, and while there’s talk of a Honda deal, it comes with a major catch: Nissan must triple its profitability in the next eight months—an almost impossible task.

Nikola’s management is reportedly considering selling parts of the company or the entire business—assuming anyone is even interested. Over the past year, Nikola’s stock has nosedived by 95%, prompting urgent discussions about its financial survival. The company only has enough cash to last through the first quarter of this year. Realistically, who in their right mind would invest in Nikola right now?

That said, I shouldn’t speak too soon. General Motors once backed Nikola despite widespread warnings that it was a terrible decision. There were at least 50 YouTube videos pointing out the red flags—such as the infamous incident where Nikola’s vehicle was towed up a hill for a staged demonstration. Yet GM still went ahead with its investment. Could they do it again? Unlikely, but stranger things have happened.

Breaking into the trucking business is no easy feat, and Nikola’s founder, Trevor Milton, was convicted of fraud in 2022 for making false claims. He was sentenced to four years in prison, yet even after his departure, people have continued to praise Nikola online—as if they were being paid to do so.

Now, Bloomberg reports that Nikola is in serious financial trouble, and while management is exploring all options—selling, finding new partners, or raising capital—the most likely outcome is bankruptcy. The hydrogen trucking industry, which Nikola claims to be a leader in, has yet to take off, and Nikola’s repeated failures have only made things worse.

Earning Performance 2024

First Quarter (Q1): Nikola delivered 40 hydrogen fuel cell electric vehicles (FCEVs) designated for end fleets, surpassing their guidance range. Second Quarter (Q2): The company increased deliveries to 72 FCEVs to its dealer network. Third Quarter (Q3): Deliveries reached 88 FCEVs, a 22% increase from the previous quarter.

Despite these delivery milestones, Nikola's financial health deteriorated. By the end of Q3 2024, the company's unrestricted cash reserves had dwindled to $198 million, reflecting a $58 million decrease from Q2. Gross revenue for Q3 stood at $33 million, with a gross loss of $62 million.

The company's market valuation experienced a sharp decline, plummeting from nearly $30 billion in 2020 to approximately $39 million by early 2025. This downturn was influenced by various factors, including technical challenges, financial losses, and legal issues surrounding founder Trevor Milton, who was convicted of fraud in 2022.

Over the past 12 months, Nikola’s stock has collapsed, and the company is scrambling to secure funding. CEO Steve Girsky has been leading the rescue efforts since August 2023, but the company has faced multiple setbacks, including costly vehicle recalls.

Cash Flow

As of the third quarter of 2024, Nikola Corporation reported unrestricted cash reserves of approximately $200 million, a decrease of $58 million from the previous quarter. The company has been utilizing about $150 million per quarter, with projections indicating a total cash usage of $615 million for 2025. Given these figures, Nikola anticipates the need to raise additional capital, as existing funds are only sufficient to support operations into the first quarter of 2025.

In terms of operational performance, Nikola achieved gross revenue of $33 million in the third quarter of 2024, an increase from $31 million in the previous quarter. However, the company reported a gross loss of $62 million for the same period, up from $55 million in the second quarter. The average selling price for fuel cell vehicles decreased by 7% from the second quarter, reflecting softer pricing as volume increased.

Despite these financial challenges, Nikola has made strides in its operational metrics. The company delivered a record 88 hydrogen fuel cell electric vehicles (FCEVs) to its dealer network in the third quarter, marking a 22% increase from the previous quarter. Year-to-date, FCEV fleet adoption has risen by 78%, with 16 end fleets deploying Nikola FCEVs. Additionally, the company expanded its dealer network to 19 sales and service locations across the United States.

The company is reportedly working with advisors to explore options for restructuring its debt, which stood at approximately $270 million in long-term debt as of the end of the third quarter.

Challenges

One of Nikola’s biggest issues has been fires. Several of its trucks have caught fire, leading to safety concerns. In July 2023, one truck reignited a month after initially catching fire at its Arizona headquarters. Then, in August, Nikola was forced to recall all of its battery-electric trucks. In September, another fire broke out at the company’s Phoenix headquarters. At one point, Nikola even tried to blame an arsonist for one of the fires—an excuse that nobody believed.

By September, Nikola had recorded at least four truck fires in just a few months, severely damaging its reputation. As more incidents occurred, the company’s stock dropped by another 15%, hitting just 88 cents per share. Since the recall in August, its shares had fallen by 55%. At the time, I made a video urging investors to sell, warning them that Nikola was headed for disaster.

Conclusion

Simply for pointing out the obvious risks and warning people not to invest in doomed companies. But investors often ignore these warnings, believing they’re smart enough to “buy the dip.”

The reality is, investing in Nikola right now is like trying to catch a falling knife. Despite the 95% stock decline, some will still see it as a bargain. But the most probable outcome is that Nikola will go bankrupt within the next 6 to 12 months—if not sooner.

@Daily_Discussion @TigerPM @TigerObserver @Tiger_comments @TigerClub

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.