Shares of Nikola plunged by as much as 25% in trading Monday morning after General Motors announced that it is giving up an equity stake in the electric truck start-up and the two said they are dropping plans to build the Badger, Nikola’s pickup truck for consumers.
In September, the automakers announced a $2 billion deal that gave GM an 11% stake in Nikola to supply battery and fuel cell technologies as well as produce the Badger pickup.
The deal was initially viewed as a no-lose situation for GM but the talks became convoluted after short-seller Hindenburg Research lobbed fraud allegations against Nikola and its founder, Trevor Milton, who resigned as the company’s executive chairman on Sept. 21.
Shares of Nikola initially rallied on the news in premarket trading Monday before plummeting. As of 9:47 a.m., Nikola shares were down about 21% to $22.05. GM stock was down less than 1%.
Wedbush analyst Dan Ives described the new deal as “a good supply partnership” rather than a “game…