The resignation of the Nikola (NASDAQ:NKLA) founder in the midst of the dispute with the short seller Hindenburg brought the manufacturer of hydrogen trucks, the biggest share price crash since its IPO. The stock slumped 34% on Monday after company founder and chairman Trevor Milton said he was leaving office of his own free will. “The focus should be on the company and its world-changing mission, not on me,” Milton explained. With immediate effect, Stephen Girsky, who was once General Motors’ Vice President, was appointed to succeed him.
JPMorgan analyst Paul Coster is sticking to his “overweight rating” for Nikola, but is lowering the price target from $ 45 to $ 41 “to meet the risk,” he said in a note on Monday. The new chairman may be a better fit for Nikola in the next phase of the company. “Trevor Milton’s resignation could potentially weigh on some of the partner and customer relationships he has built, and employee morale is likely fragile right now,” he said. But business should continue as planned.
Milton’s departure is positive for the stock, even if the “look of the resignation is terrible,” says Jeffrey Osborne of Cowen. The house still has a price target of $ 79 (!) And recommends buying the stock accordingly. After the resignation, the company should be able to concentrate on the development of its class 8 trucks and the associated infrastructure and bring the contract with General Motors to an end, “said Osborne.
Wedbush’s Dan Ives described Milton’s departure as “shocking”. Milton plays a key role in the strategic implementation of the company’s vision, the expert said. Nikola has a strong cast and now everything revolves around the future execution with the GM partnership as the linchpin for success. Ives confirmed the “Hold” recommendation with a price target of 45 dollars.
As one billionaire said :”The time to buy is when there’s blood in the streets”, and there was a lot of blood in the streets on Monday, when many bargain hunters invested in NKLA shares.