Shares of electric semitruck maker Nikola (NKLA -4.18%) are up 34% in the last month. That return would have been even higher, however, if it weren't for this week's move. As of Thursday's market close, Nikola stock is down 11.5% since Monday, according to data provided by S&P Global Market Intelligence.
When Nikola reported its fourth-quarter and full-year 2021 results in late February, the company said it planned to begin commercial production by March 21. Investors began bidding its shares up throughout the month, and that continued when Nikola confirmed that it did, in fact, begin production as scheduled. But shares tumbled this week as some investors may have felt the stock surge provided an opportunity for profit taking.
One factor that helped drive the outsize gains in March was just how far Nikola stock had fallen prior to that. Shares hit an all-time low below $6.50 in early March, prior to the announcement that Nikola's commercial production schedule remained on track.
There hasn't been any new company news that would explain the stock's double-digit retrenchment this week. Since it confirmed production had started, the company reiterated that it expects to deliver between 300 and 500 Tre battery electric semitrucks to customers this year. Those sales should generate its first meaningful revenue of between $90 million and $150 million.
It's not surprising that shares of a start-up company involving many risks would have a volatile stock. Some short-term traders likely took advantage of that. A sharp rise in March likely led traders to take profits this week. Longer-term investors will want to look forward to what the company says when it reports its financial and operational first-quarter 2022 update scheduled for the morning of May 5.