Whitney Tilson: Nikola’s Stock Is Headed To Zero

Whitney Tilson’s email to investors discussing the latest on Nikola, the stock is headed to zero; Big Ideas 2020.

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Q2 2020 hedge fund letters, conferences and more

The Latest On Nikola

2) All sorts of breaking news on electric-vehicle maker Nikola (NKLA)...

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From a friend:

It's never a good sign when someone who is under criminal investigation by the Department of Justice ("DOJ") and under investigation by the U.S. Securities and Exchange Commission deletes his Twitter account – see: https://twitter.com/nikolatrevor.

Does he think that nobody would notice or that the DOJ can't subpoena the account history from Twitter?

Betting pool on when Trevor Milton flies his jet out of the U.S. to a non-extradition treaty country:

  1. Less than 24 hours from now

  2. 24 to 48 hours from now

  3. A bit longer

And here are three articles in today's Wall Street Journal:

A Nikola executive defended the electric-truck firm's technology and business plan, telling an investor conference that its partners are staying the course following the departure of its high-profile founder and executive chairman.

(I'm shocked – SHOCKED! – that the company wants investors to "really focus on the future." Move along, nothing to see here...)

The response has been different for Mr. [Nate] Anderson's most recent work, a 67-page report published Sept. 10. That report, alleging a series of improprieties at Nikola centering on founder Trevor Milton, sent shares of the electric-truck startup down 33% in two weeks. U.S. securities regulators and the Justice Department launched an investigation into whether Nikola misled investors, and on Monday Mr. Milton said he resigned as executive chairman. The stock's fall has helped Mr. Anderson and his five-person firm, which bet against Nikola shares, score sizable profits...

Talks between electric-truck maker Nikola and several potential partners, including BP, to build hydrogen-refueling stations stalled following allegations the company had misled investors, according to people familiar with the matter.

Nikola's Stock Is Headed To Zero

4) While I think Nikola's stock is headed to zero, I'm actually super bullish on electric vehicles.

Speaking of which, I enjoyed this 81-slide presentation, "Big Ideas 2020." It was first published in February by ARK Investment Management – best known for championing Tesla (TSLA). In it, ARK shares its views on 11 sectors:

    1. Deep Learning – From Vision to Language
    2. Streaming Media – The Primary Technology Behind Content Distribution
    3. Electric Vehicles – Faster Adoption Than Most Think
    4. Automation – Increased Productivity and More Jobs
    5. 3D Printing – An Underestimated Technology
    6. Autonomous Ridehailing – The Future of Transportation
    7. Aerial Drones – A Cost Saver and Potential Life Saver
    8. Next Generation DNA Sequencing – The Transformation of Oncology
    9. Biotech R&D Efficiency – The Convergence of Technologies in Healthcare
    10. Digital Wallets – The Transformation of Banking
    11. Bitcoin – An Evolution of Monetary Systems

I think ARK is totally right that the adoption of electric and autonomous vehicles will happen sooner and at greater scale than anyone thinks, as this chart from the presentation shows:

Nikola's Stock

But I think ARK is totally wrong on bitcoin – as I've written many times before, I think cryptocurrencies are a techno-libertarian pump-and-dump scheme.

It's OK that we disagree – that's what makes markets!