The Nikola Corp (NASDAQ: NKLA) stock price rallied over 100% during Thursday and Friday last week compared to its closing price on Wednesday. The EV manufacturer saw its shares rise over the two days as aggressive retail traders forced short sellers to cover their positions.
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The rally in Nikola shares was triggered by news that the company had entered into a deal with BayoTech to supply it with 50 electric trucks and to purchase low-carbon hydrogen from BayoTech. The deal reignited investor interest in the EV company.
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Nikola is one of the most shorted stocks, with about 22.7% of its outstanding shares being sold short as of July 12, 2023, according to data from analytics firm Ortex. Over 317 million Nikola shares were traded on Thursday, marking a significant volume high for the company as buyers and sellers exchanged positions.
As one of the smaller EV manufacturers, Nikola has struggled with the stiff competition witnessed in the industry, combined with supply chain disruptions that saw the company produce just 33 trucks in Q2 2023, compared to 63 trucks in Q1 2023.
Peter Hillerberg, co-founder at Ortex, said: “The recent price increase in Nikola looks very likely to have been accelerated by short sellers closing some of their positions and adding more buy pressure on the stock.”
The company has taken drastic measures to reduce its cash burn, including announcing plans to fire about 270 employees. The company is also looking to liquidate the assets of Romeo Power, the battery manufacturing firm it acquired for $144 million in August 2022.
Nikola Corp is also embroiled in a legal tussle with its founder and top shareholder, Trevor Milton, who unceremonially left his position with the company after lying about its progress to shareholders before its IPO.
Retail investor interest in the EV company will likely remain high as Nikola stock was the most traded stock on Thursday, having outdone Tesla and Rivian, which were also quite popular with retail investors. So, will NKLA stock keep rising? Only time can tell.
*This is not investment advice.
Nikola stock price.
The Nikola stock price rallied higher on Thursday and Friday as retail traders piled into teh
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