Nikola (NKLA 7.23%) stock recorded another day of big gains in Thursday's trading. The electric vehicle (EV) company's share price closed out the daily session up 14%.
Nikola stock began gaining ground last week after the company celebrated the opening of its first Hyla hydrogen refueling station in Southern California. The rally received an extra boost of energy after it was announced Wednesday that Alberta, Canada, would be getting its first commercial hydrogen refueling station courtesy of Nikola's Hyla brand and a collaboration with Suncor, Leduc County, Emissions Reduction Alberta, and Blackjack Roadhouse.
Due to Nikola stock being heavily shorted, positive developments on the hydrogen-refueling front also appear to be triggering a short-squeeze. Many investors had bet against the stock by borrowing shares with the hope that they could buy them back at a lower price and score the difference as a profit.
Is it time to buy Nikola stock?
Due to the sudden share price surge, the short-sellers are now apparently quickly buying back shares to close out their positions and avoid potentially massive losses. That purchasing is creating even more bullish momentum for the stock. Nikola stock is now up roughly 57% over the last five trading days.
While it's possible that Nikola stock could continue heading higher in the near term, it's important to keep in mind that most short-squeezes tend to be fairly short-lived. The EV specialist's share price has already seen a dramatic upswing, and the long-term outlook for the business remains fraught despite recent signs of progress for its refueling station business.
Nikola's fuel-cell-electric-vehicle trucks continue to be the company's main source of revenue and continue to be sold at massive losses. Last year, the business recorded a net loss of roughly $966.3 million on sales of approximately $35.8 million.
With the business burning cash at a rapid pace, Nikola will need to secure new funding through new stock sales or taking on debt. The company has a poor track record when it comes to executing and fulfilling promises, and its weak business momentum and financial position suggest that the stock won't work out as a long-term investment.
