Stocks can't go straight up forever, and even though the Nasdaq Composite (NASDAQINDEX:^IXIC) has had an amazing year in 2020, its upward momentum wasn't enough to send the much-followed index toward another record high. As of 1:30 p.m. EST, the Nasdaq Composite was down around a third of a percent, having recovered from much larger losses earlier in the trading session.
One of the biggest downward movers in the Nasdaq was electric truck specialist Nikola (NASDAQ:NKLA), which got some bad news about a prospective collaboration. Meanwhile, Moderna (NASDAQ:MRNA) continued to gain ground as the company moved forward with its efforts to produce a vaccine and hopefully help to bring the COVID-19 pandemic under control in the months ahead.
Nikola makes a disappointing deal
Shares of Nikola plunged 24% on Monday afternoon. Even though the company is in the red-hot electric vehicle (EV) industry, Nikola didn't make its shareholders happy with a scaled-back deal with automaker giant General Motors (NYSE:GM).
Investors had looked forward to a full-scale collaboration between Nikola and GM, with the Detroit industry leader looking to jump-start its own EV efforts with the upstart's cutting-edge technology. However, controversy at Nikola led to the departure of founder Trevor Milton, putting the agreement between the two companies in jeopardy.
Although GM didn't pull out of the deal entirely, it's now missing a key element: the Nikola Badger pickup truck. Nikola said that it's not going to build the Badger, instead focusing on its electric-driven heavy truck line. Nikola will buy hydrogen fuel cells from General Motors, with the potential of also sharing battery technology.
Nikola doesn't look anything like it did a few short months ago, and investors are having to reassess the EV specialist's prospects. With so many new entrants in the industry, it's going to be hard for Nikola to get back its lost momentum.
Moderna keeps moving forward
Elsewhere, Moderna's shares soared 17% Monday afternoon. The biotech company has had some great news on the coronavirus front, and the latest study results could be the last piece of the puzzle that shareholders have been waiting to see.
Moderna released data showing that its mRNA-1273 coronavirus vaccine candidate demonstrated roughly 94% efficacy in preventing infection. None of those receiving the vaccine contracted a severe case of COVID-19.
With these final results, Moderna now intends to apply for emergency use authorization for its vaccine candidate by the end of Monday. From there, the U.S. Food and Drug Administration (FDA) will make an independent advisory committee available to meet on Dec. 17 to review the data on mRNA-1273 and to make a recommendation regarding the authorization request. The FDA will then schedule a final meeting shortly thereafter.
Moderna won't be the first company bringing a vaccine candidate to the FDA, but it's almost certain that the regulatory agency will approve as many different vaccines as it can once they demonstrate their effectiveness. That should leave Moderna with a golden opportunity to show the value of its innovation as it looks for ways to treat other diseases in the years to come.