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  • Nikola the company/stock

    So I'm a big proponent of Tesla, EVs, and clean energy. But I don't get Nikola and hydrogen fuel cells. Yesterday it (NKLA) went up 100% during the day and another 25% or so in the AH.

    From what I understand, hydrogen fuel cells supposedly bridges the feeling of refueling a car with EVs and zero emissions travel. It has more energy per weight than a battery so it's lighter and more efficient in a sense. The problems I see:
    • It's prohibitively expensive to build out the infrastructure to support hydrogen fuel cell vehicles. If it's that expensive and no one has one, you can't make money from it. Chicken and the egg scenario.
    • Hydrogen is expensive. Right now it's maybe 2-3x the price of gas/diesel and like 6-10x the price of electricity. In the future it may get cheaper to the point where it's the same price as gas/diesel.
    • There's a thinking that refueling a hydrogen cell is a lot faster than charging an EV. While it takes maybe 5 minutes to fuel up the car, you'll need another 7 minutes or so for the hydrogen pump to re pressurize for another car. So it's faster but not that much in the grand scheme. You also can't have a hydrogen station at home or work, but you can charge your EV at home or work.
    • Getting the hydrogen to move your car. So to get electricity to move your car, you produce the electricity, then transfer it by wire into your car where it turns the electric motors. To get the hydrogen to move your car, you have to produce the electricity, obtain natural gas (the majority today), use the electricity to obtain hydrogen, compress that, transfer it to the fueling station where it needs compression, transfer it into your car, have the car turn the hydrogen into electricity at like 60% efficiency where it turns the electric motor.
    • The company itself doesn't make anything. It outsources building the trucks and everything else seemingly. Previously they claimed to be vertically integrated, but they also claim they know they're not the best at everything so they partner with everyone to get things done.
    • As of close yesterday, it had a 30B valuation and up to 35B in the AH. For a company that has no revenue and doesn't make anything.
    While I've been typing this, I'm glad to see that there's some sense in the market and it opened at $93.13 and now down to $61. Long term I don't see the value in hydrogen fuel cells except for very niche markets or uses. I certainly don't understand this company.

    My plan is to wait for it to settle a bit, wait until an upcoming earnings call where they have to answer questions from investors then buy long dated puts as I don't see how this company makes it. Only reason I didn't try to buy puts now is that the market can stay irrational longer than you can stay solvent as there's a lot of FOMO and cash on the sidelines now. Also because they're super expensive. Any other ideas?

  • #2
    Well, I've never heard of that company until now. Who knows where it will go; if it rhymes with "Ricola" then it will maybe do well. It is back to $80 as I type this.

    If I were into that sort of thing, the stock looks like a good one to short.

    I TLH'ed some BRK and bought some RTX. It looks like I'm already down. My stockpicking itch has been scratched for the quarter.

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    • #3
      I think as long as Tesla is soaring, this stock will be sucked along with it. It’s not trading on great analysis, it is just a “pets.com” or “random-coin/bitcoin peak” situation for now. This type of stock behavior is pretty common in trendy sub-sectors.

      Personally, I’m waiting for the daring company product that uses his cat’s name though, before I go all-in. Maybe like, “Macak’s Electric Nether-Region Manscaper with Tesla battery pack” or something similar. That’s when we will see the true potential of Tesla’s technology.

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      • #4
        Wait for it... .... .... Nikola Tesla

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        • #5
          The market is clearly irrational right now....

          Hertz up 300% from last week during bankruptcy proceedings. Luckin up 100% upon resuming trading after accounting fraud and delisting. Copycat Nikola stock up big for no apparent reason.

          Combination of FOMO, Robinhood traders, and degenerate gamblers stuck at home, would be my guess.

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          • #6
            "The company itself doesn't make anything. It outsources building the trucks and everything else seemingly. Previously they claimed to be vertically integrated, but they also claim they know they're not the best at everything so they partner with everyone to get things done."

            This argument you made may be a great argument for not investing in this company. Quite the "Moat" free statement

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            • #7
              Originally posted by xraygoggles View Post
              Combination of FOMO, Robinhood traders, and degenerate gamblers stuck at home, would be my guess.
              There's a lot of this going on. It's pretty rampant in the energy sector. $CHK has cost some people a lot of money over the last 24 hours.

              I will say that Nikola's truck looks way better than the Cyber Truck. It's like an actual automotive engineer designed it instead of a kindergartener that only knows how to draw triangles.

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              • #8
                I just bought a mix of short and long term puts on it, lets see how this turns out...seems like the next Theranos

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                • #9
                  Originally posted by Lordosis View Post
                  Wait for it... .... .... Nikola Tesla
                  Yeah seriously. I've been wondering this for months. One of them couldn't have picked a different name? I actually really like Nikola Tesla as an inventor, engineer, electrical genius, weirdo.
                  $1 saved = >$1 earned. ✓

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                  • #10
                    Originally posted by CordMcNally View Post

                    I will say that Nikola's truck looks way better than the Cyber Truck. It's like an actual automotive engineer designed it instead of a kindergartener that only knows how to draw triangles.
                    Nikola's truck definitely looks like a nice futuristic traditional truck (demolition man before Sylvester Stallone or minority report). Tesla's truck looks more apocalyptic future (mad max).

                    Personally I like the idea of a cyber vehicle and would get a smaller truck or car version as long as it's still one of the safest cars on the road. Never have to worry about door dings, paint chips, or rust ever again. With the structure on the outside, it also leaves more room on the inside.

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                    • #11
                      After reading about the disaster call Toyota Mirai hydrogen fuel cell car, I would never buy one. Why would I go to a fuel cel station to wait in line and fill up hydrogen when I can get it charged at home at night while I sleep.

                      Anyone who even dreams of a hydrogen fuel cell car should hear the experiences of owners of Mirai. I doubt anyone buys it. And those who lease it can't wait for their lease to end so that they can had this POS back to Toyota.

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                      • #12
                        Originally posted by Lordosis View Post
                        Wait for it... .... .... Nikola Tesla
                        Originally posted by CordMcNally View Post
                        I will say that Nikola's truck looks way better than the Cyber Truck. It's like an actual automotive engineer designed it instead of a kindergartener that only knows how to draw triangles.
                        Not that I speculate on stocks, but those two aspects give me pause.

                        1. Nikola: Piggybacking on the Tesla name. Followers instead of leaders. Makes them look like opportunists trying to cash in on the Tesla name.
                        2. Their vehicle renders are too flashy. In fact, so is their website. Looks like form over substance.

                        I could be wrong, but it looks like they are trying to ride the coattails of Tesla and are seeking investors that are looking for the next Tesla stock.

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                        • #13
                          Well it took a bit, but Trevor Milton apparently resigned overnight/this morning from his executive chairman role. The stock is down 28% in the premarket. The Hindenburg claims of fraud and misleading investors as well as all the pressure from social media and the news must've gotten to him.

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                          • #14
                            Originally posted by Nysoz View Post
                            Well it took a bit, but Trevor Milton apparently resigned overnight/this morning from his executive chairman role. The stock is down 28% in the premarket. The Hindenburg claims of fraud and misleading investors as well as all the pressure from social media and the news must've gotten to him.
                            I figured it was because there are only so many tricks you can use to keep a $10B company afloat with $0 revenue.

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                            • #15
                              Originally posted by CordMcNally View Post

                              I figured it was because there are only so many tricks you can use to keep a $10B company afloat with $0 revenue.
                              Hey now, they did log revenue from putting solar panels on Trevor’s house.

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