Speculative traders are betting big that Tesla won't be the only successful company of the future named for inventor Nikola Tesla.
Shares of Nikola Corporation, which makes battery-electric and hydrogen-powered trucks, jumped more than 20% on Tuesday shortly after the open, before reversing course and plunging more than 20%. At that point, trading was paused for volatility. The stock wound up closing 8.8% higher, building on Monday's surge which saw shares more than double.
The company began trading on June 4 after a reverse merger with VectoIQ, which is a publicly-traded special purpose acquisition company headed by former vice chairman of General Motors Stephen Girsky. The deal was announced in early March.
Based on Tuesday's closing price, Nikola is now more valuable than Ford, according to data from FactSet. The electric vehicle maker is valued at $28.799 billion, compared with Ford's $28.794 billion market cap.
Part of Monday's surge was due to CEO Trevor Milton announcing a reservation date for the company's upcoming Badger truck. His tweet follows a previous statement by the company that it would need to partner with an established OEM in order to bring the Badger to market.
The stock's surge is despite the fact that Nikola, which was founded in 2015, doesn't expect to generate revenue until 2021, and shows the dispensation investors are willing to give to companies that promise vehicles of the future. Tesla has yet to turn an annual profit, but shares have surged 127% this year. Hydrogen fuel cell makers Plug Power and Bloom Energy have also seen their stocks pop in the past as investors rush into these greener fuel alternative names.
Fuel cell technology combines hydrogen stored in a tank with oxygen from the air to produce electricity, with water vapor as the by-product. It's been around for decades and while there are machines such as fork lifts that use the technology, it has yet to become mainstream due to cost, among other things.
Nikola said that its pre-orders represent more than $10 billion in revenue, but it remains to be seen if these orders will come to fruition. Tesla, General Motors and Ford are among the other companies that have announced plans to produce all-electric pickups, and it's unclear if there's demand to support all of their efforts.
Additionally, Tesla's past delivery issues underscores just how difficult it is to bring a vehicle to market.
Nikola plans to roll out the Nikola Tre Class 8 BEV in 2021, followed by Nikola Two Class 8 FCEV in 2023.
By 2027 the company is forecasting production of 30,000 fuel cell electric vehicle trucks.
The company raised more than $700 million through its reverse merger, as well as from investments from Fidelity Management & Research Company and Jeff Ubben's ValueAct Spring Fund.
"We have a lot of money in our account, we have no debt. But no doubt we're going to have to raise more money," Milton said last week on CNBC's "Squawk on the Street." "That will come down the road once we hit benchmarks, and then they investors are like - once they know you've hit your benchmarks they just open up their pocketbooks. At that point it's just all execution, and we're right on the edge of that rihgt now."
- CNBC's Michael Wayland contributed reporting.
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