Please ensure Javascript is enabled for purposes of website accessibility

Why Nikola's Shares Popped 8.5% on Thursday

By Travis Hoium – Aug 6, 2020 at 1:20PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Should it be any surprise that the hydrogen-electric vehicle upstart's shares are volatile?

What happened 

Shares of Nikola (NKLA 9.23%) jumped by as much as 8.5% in trading Thursday morning, recouping some of the value they lost Wednesday. At 1:15 p.m. EDT, shares were up by about 5% for the day. 

So what

Nikola's shares fell Wednesday after investors found a number of reasons to be displeased with the company's earnings report. For some, it was the company's mere $36,000 in revenue; others were disappointed by a lack of new announcements about future vehicle production. But the reality is that little has changed for Nikola, which is still a pre-revenue start-up in the high-growth hydrogen-electric vehicle market. 

NKLA Chart

NKLA data by YCharts

Nikola's stock chart may actually tell us more about the moves happening Thursday. Traders who were selling the earnings news on Wednesday have lost out to the traders who were pushing the stock higher earlier this week; the share price is now much closer to where it closed on Tuesday. 

Rendering of Nikola manufacturing facility.

Image source: Nikola.

Now what

Nikola's share price volatility isn't particularly surprising for such an early-stage company. It's more of a start-up than it is a real manufacturer, and while it has a lot of potential, the company has much to do if it's going to execute on scale-up plans that would let it reach the production stage by late 2021. Investors should expect more volatility ahead, even on days like this one, where there's no fresh news out about the company. 

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Nikola Corporation Stock Quote
Nikola Corporation
NKLA
$3.85 (9.23%) $0.33

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
331%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.