All discussion of Nikola Motors

[bkp_duke]

As putrid as it is currently stands that GM may get away with the tax credit ploy, I am thinking that were they to hold 50%+1 shares, they absolutely would be unable to so do.

Does anyone know differently?

As far as I care, they can have the tax credits. In the end, I think it will cost them too much. Just the stigma of being associated with NKLA could be enough to put GM under once EVs go mainstream.

 

[ZsoZso]

The "market" has a renewed hope that the GM deal re-negotiation may still save Nikola, that's why it went up today.
Hope springs eternal and all that.

However, Nikola has multiple law suits on their hand (lawyers are not cheap), a factory they are supposed to spend money on building, a monthly burn rate to pay their employees (to keep producing those CGIs and PPTs), and they already promised to pay GM more money for the badger production line setup than they have in the bank. That does not look good, there is no way they can even pay the pre-prod costs to GM let alone paying cost+ for any trucks made.

So if GM does any elementary math they can see that the win-win deal they got will not work out anywhere near as good as it seemed. Sure, they can suck a few hundred $$$ million out of this husk still, but they will have to put some of their own money into the project if they want to get to the first production badger, and then they need to figure out how to sell it, because they ain't getting any help from Nikola for that either.

If GM does not walk away, squeezes more out of the Nikola deal and plows on with this saga, then they are more desperate than I thought they were.

 

[AudubonB]

==>As far as I care, they can have the tax credits<==. In the end, I think it will cost them too much. Just the stigma of being associated with NKLA could be enough to put GM under once EVs go mainstream.

Well, on fundamentals I disagree with you, BUT-
whatever are those mischief-makers going to do when they try disparaging Tesla for having accrued same?

 

[Knightshade]

As putrid as it is currently stands that GM may get away with the tax credit ploy, I am thinking that were they to hold 50%+1 shares, they absolutely would be unable to so do.

Does anyone know differently?

AFAIK that's exactly the case- they can own up to exactly 50% and Nikola still gets their own 200,000 quota of $7500 fed tax credits- same as Polestar with Volvo owning 50% of them. Above that not so much.

 

[mongo]

As putrid as it is currently stands that GM may get away with the tax credit ploy, I am thinking that were they to hold 50%+1 shares, they absolutely would be unable to so do.

Does anyone know differently?

I knew I had read this, but then couldn't find it the last X times I looked, so I kept by yap shut. Finally re-found it. Basically, the 50% ownership rule applies.

Note: Copy paste had issues, so follow the links if things look off.

EV Credit Law:
26 U.S. Code § 30D - New qualified plug-in electric drive motor vehicles

(2) Phaseout period
For purposes of this subsection, the phaseout period is the period beginning with the second calendar quarter following the calendar quarter which includes the first date on which the number of new qualified plug-in electric drive motor vehicles manufactured by the manufacturer of the vehicle referred to in paragraph (1) sold for use in the United States after December 31, 2009, is at least 200,000.

(3) Applicable percentage For purposes of paragraph (1), the applicable percentage is—
(A) 50 percent for the first 2 calendar quarters of the phaseout period,
(B) 25 percent for the 3d and 4th calendar quarters of the phaseout period, and
(C) 0 percent for each calendar quarter thereafter.
(4) Controlled groups
Rules similar to the rules of section 30B(f)(4) shall apply for purposes of this subsection.

26 U.S. Code § 30B - Alternative motor vehicle credit

(4) Controlled groups
(A) In general
For purposes of this subsection, all persons treated as a single employer under subsection (a) or (b) of section 52 or subsection (m) or (o) of section 414 shall be treated as a single manufacturer.

(B) Inclusion of foreign corporations
For purposes of subparagraph (A), in applying subsections (a) and (b) of section 52 to this section, section 1563 shall be applied without regard to subsection (b)(2)(C) thereof.

26 U.S. Code § 52 - Special rules

(a) Controlled group of corporations
For purposes of this subpart, all employees of all corporations which are members of the same controlled group of corporations shall be treated as employed by a single employer. In any such case, the credit (if any) determined under section 51(a) with respect to each such member shall be its proportionate share of the wages giving rise to such credit. For purposes of this subsection, the term “controlled group of corporations” has the meaning given to such term by section 1563(a), except that—
(1) “more than 50 percent” shall be substituted for “at least 80 percent” each place it appears in section 1563(a)(1), and

(2) the determination shall be made without regard to subsections (a)(4) and (e)(3)(C) of section 1563.

(b) Employees of partnerships, proprietorships, etc., which are under common control: For purposes of this subpart, under regulations prescribed by the Secretary—
(1) all employees of trades or business (whether or not incorporated) which are under common control shall be treated as employed by a single employer, and
(2) the credit (if any) determined under section 51(a) with respect to each trade or business shall be its proportionate share of the wages giving rise to such credit.

The regulations prescribed under this subsection shall be based on principles similar to the principles which apply in the case of subsection (a).

Definition: controlled group of corporations from 26 USC § 52(a) | LII / Legal Information Institute

controlled group of corporations
For purposes of this subpart, all employees of all corporations which are members of the same controlled group of corporations shall be treated as employed by a single employer. In any such case, the credit (if any) determined under section 51(a) with respect to each such member shall be its proportionate share of the wages giving rise to such credit. For purposes of this subsection, the term “controlled group of corporations” has the meaning given to such term by section 1563(a), except that—

26 U.S. Code § 1563 - Definitions and special rules

(a) Controlled group of corporations For purposes of this part, the term “controlled group of corporations” means any group of—
(1) Parent-subsidiary controlled group One or more chains of corporations connected through stock ownership with a common parent corporation if—

(A) stock possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote or at least 80 percent of the total value of shares of all classes of stock of each of the corporations, except the common parent corporation, is owned (within the meaning of subsection (d)(1)) by one or more of the other corporations; and

(B) the common parent corporation owns (within the meaning of subsection (d)(1)) stock possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote or at least 80 percent of the total value of shares of all classes of stock of at least one of the other corporations, excluding, in computing such voting power or value, stock owned directly by such other corporations.​

(2) Brother-sister controlled group

Two or more corporations if 5 or fewer persons who are individuals, estates, or trusts own (within the meaning of subsection (d)(2)) stock possessing more than 50 percent of the total combined voting power of all classes of stock entitled to vote or more than 50 percent of the total value of shares of all classes of stock of each corporation, taking into account the stock ownership of each such person only to the extent such stock ownership is identical with respect to each such corporation.​

(3) Combined group Three or more corporations each of which is a member of a group of corporations described in paragraph (1) or (2), and one of which—

(A) is a common parent corporation included in a group of corporations described in paragraph (1), and also
(B) is included in a group of corporations described in paragraph (2).​

(4) Certain insurance companies
Two or more insurance companies subject to taxation under section 801 which are members of a controlled group of corporations described in paragraph (1), (2), or (3). Such insurance companies shall be treated as a controlled group of corporations separate from any other corporations which are members of the controlled group of corporations described in paragraph (1), (2), or (3).

26 U.S. Code § 414 - Definitions and special rules

(m) Employees of an affiliated service group
(1) In general
For purposes of the employee benefit requirements listed in paragraph (4), except to the extent otherwise provided in regulations, all employees of the members of an affiliated service group shall be treated as employed by a single employer.

(2) Affiliated service groupFor purposes of this subsection, the term “affiliated service group” means a group consisting of a service organization (hereinafter in this paragraph referred to as the “first organization”) and one or more of the following:
(A) any service organization which—

(i) is a shareholder or partner in the first organization, and
(ii) regularly performs services for the first organization or is regularly associated with the first organization in performing services for third persons, and​

(B) any other organization if—

(i) a significant portion of the business of such organization is the performance of services (for the first organization, for organizations described in subparagraph (A), or for both) of a type historically performed in such service field by employees, and
(ii) 10 percent or more of the interests in such organization is held by persons who are highly compensated employees (within the meaning of section 414(q)) of the first organization or an organization described in subparagraph (A).​

(3) Service organizations
For purposes of this subsection, the term “service organization” means an organization the principal business of which is the performance of services.


(4) Employee benefit requirementsFor purposes of this subsection, the employee benefit requirements listed in this paragraph are—
(A) paragraphs (3), (4), (7), (16), (17), and (26) of section 401(a), and
(B) sections 408(k), 408(p), 410, 411, 415, and 416.
(5) Certain organizations performing management functionsFor purposes of this subsection, the term “affiliated service group” also includes a group consisting of—
(A) an organization the principal business of which is performing, on a regular and continuing basis, management functions for 1 organization (or for 1 organization and other organizations related to such 1 organization), and
(B) the organization (and related organizations) for which such functions are so performed by the organization described in subparagraph (A).
For purposes of this paragraph, the term “related organizations” has the same meaning as the term “related persons” when used in section 144(a)(3).

(6) Other definitions For purposes of this subsection—

(A) Organization defined The term “organization” means a corporation, partnership, or other organization.​

(B) Ownership In determining ownership, the principles of section 318(a) shall apply.​

(o) Regulations The Secretary shall prescribe such regulations (which may provide rules in addition to the rules contained in subsections (m) and (n)) as may be necessary to prevent the avoidance of any employee benefit requirement listed in subsection (m)(4) or (n)(3) or any requirement under section 457 through the use of—
(1) separate organizations,
(2) employee leasing, or
(3) other arrangements.
The regulations prescribed under subsection (n) shall include provisions to minimize the recordkeeping requirements of subsection (n) in the case of an employer which has no top-heavy plans (within the meaning of section 416(g)) and which uses the services of persons (other than employees) for an insignificant percentage of the employer’s total workload.

 

[CyberGus]

 

[ZsoZso]

Nikola and Trevor is on the war-path to get videos taken down by Youtube for criticizing them including various videos by Tom Nash who was linked multiple times on this thread. Of course, the alleged reason is for "copyright infringement" on some segments included that are being criticized.

Sleezebaginess turned to 11.

Also:

 

[30seconds]

GM would be nuts to go forward with this deal. Nikola is a house of cards on fire. From a trust, legal, brand and management standpoint it is literally the last company you want to do any sort of partnership with.

Then again this is GM. Overcoming 30+ years of piss poor decision making to make the wise decision to walk away is no more than a 50/50 bet at this point.

 

[vikings123]

The "market" has a renewed hope that the GM deal re-negotiation may still save Nikola, that's why it went up today.
Hope springs eternal and all that.

However, Nikola has multiple law suits on their hand (lawyers are not cheap), a factory they are supposed to spend money on building, a monthly burn rate to pay their employees (to keep producing those CGIs and PPTs), and they already promised to pay GM more money for the badger production line setup than they have in the bank. That does not look good, there is no way they can even pay the pre-prod costs to GM let alone paying cost+ for any trucks made.

So if GM does any elementary math they can see that the win-win deal they got will not work out anywhere near as good as it seemed. Sure, they can suck a few hundred $$$ million out of this husk still, but they will have to put some of their own money into the project if they want to get to the first production badger, and then they need to figure out how to sell it, because they ain't getting any help from Nikola for that either.

If GM does not walk away, squeezes more out of the Nikola deal and plows on with this saga, then they are more desperate than I thought they were.

It seems like GM does not care about the reputation hit from this failed partnership. The market is irrational and seems to bet that GM will amend the terms of the partnership but not completely back out.

I wonder if the market is giving us one final chance to go short with 6-9 months dated puts. It was not on my radar but the recent run up in SP has me thinking. I just don’t see a roadmap for Nikola that is financially viable both from a top line and bottom line perspective.

Edit: Nevermind, I just looked up some puts and they are crazy expensive. Might have to wait for IV to drop so I guess just watching for now.

 

[Cosmacelf]

Everything about NKLA is expensive. Stock price, shorting price, call options, put options... Good stock to just ignore frankly.

 

[ItsNotAboutTheMoney]

It seems like GM does not care about the reputation hit from this failed partnership. The market is irrational and seems to bet that GM will amend the terms of the partnership but not completely back out.

I wonder if the market is giving us one final chance to go short with 6-9 months dated puts. It was not on my radar but the recent run up in SP has me thinking. I just don’t see a roadmap for Nikola that is financially viable both from a top line and bottom line perspective.

Edit: Nevermind, I just looked up some puts and they are crazy expensive. Might have to wait for IV to drop so I guess just watching for now.

It'll be under the Nikola name and will allow them to make an easy $700M.
Make the vehicles.
Dump them at a loss.
Pocket the money.
Nikola bankrupt. GM richer.
Stock market should love it.
They only need to wait until after the election to see if there's a Republican administration and a risk of the tax credits disappearing.

 

[Knightshade]

The "market" has a renewed hope that the GM deal re-negotiation may still save Nikola, that's why it went up today..

FWIW I was speaking with a friend of mine last night, to whom I'd been recommending TSLA for some time... he happened to mention his wife had bought some NKLA. I asked why she's investing in a fraud company instead of an actual company.

He said "they're not a fraud company they're just starting out- and it was a lot cheaper than Tesla stock and if EVs really do get big then all the companies should do well"

This is a legit smart person- computer programmer, well read and well educated- but who appears to be uninterested in being educated about investing and financial decisions.

And they're clearly not alone in the market.

 

[bkp_duke]

FWIW I was speaking with a friend of mine last night, to whom I'd been recommending TSLA for some time... he happened to mention his wife had bought some NKLA. I asked why she's investing in a fraud company instead of an actual company.

He said "they're not a fraud company they're just starting out- and it was a lot cheaper than Tesla stock and if EVs really do get big then all the companies should do well"

This is a legit smart person- computer programmer, well read and well educated- but who appears to be uninterested in being educated about investing and financial decisions.

And they're clearly not alone in the market.

 

[Cal1]

Friends don't let friends buy NKLA!

 

[Cosmacelf]

FWIW I was speaking with a friend of mine last night, to whom I'd been recommending TSLA for some time... he happened to mention his wife had bought some NKLA. I asked why she's investing in a fraud company instead of an actual company.

He said "they're not a fraud company they're just starting out- and it was a lot cheaper than Tesla stock and if EVs really do get big then all the companies should do well"

This is a legit smart person- computer programmer, well read and well educated- but who appears to be uninterested in being educated about investing and financial decisions.

And they're clearly not alone in the market.

Yep. Smart person that does zero real due diligence. My guess is that 99% of retail investors are just like him.

He isn't even correct on the numbers. In early 2013, you could buy Tesla pre-split at $30/share for a $5B market cap. That's for a company that had started shipping a 20,000 vehicle a year car in 2012 and had zero competition as far as the eye could see. So, now he's comparing that to NKLA which you can buy for $9B market cap, but they have zero IP, zero production line and a $400B market cap company as a competitor which will beat them to the punch on all their products. The two situations are not even remotely comparable.

 

[Cosmacelf]

Smart people have a bad habit of thinking they can make the correct decisions without any real work, just because they are smart. Correct decision making requires research, and hard work no matter how smart/dumb you are. The only thing that might be able to help you take a short cut is experience. Like ten year's worth at a minimum in the field. But even then you still have to look at the numbers. Analogizing NKLA to TSLA based on where they are at in the product cycle is the height of lazy thinking (and incorrect. Again, NKLA is where TSLA was way pre-IPO)

 

[vikings123]

I guess the rollercoaster continues. Apparently management confirmed "production targets" and stock was up as much as 31% today. Amazing how gullible human beings can be.

Also Girsky confirmed that they did their due diligence and "due diligence was based on the company's current technologies as well as future execution plans". Sounds like a good out for Girsky and GM. I feel like the company will die a slow death now that the scammer in chief is out.

 

[HVM]

Nikola and Trevor is on the war-path to get videos taken down by Youtube for criticizing them including various videos by Tom Nash who was linked multiple times on this thread. Of course, the alleged reason is for "copyright infringement" on some segments included that are being criticized.

Sleezebaginess turned to 11.

Also:

From another Youtuber:

Casgains Academy
Nikola Motor Company, Trevor Milton, or a Nikola supporter is attempting to silence Nikola critics like @Tom Nash and myself right now.

In my opinion, these actions are likely from the remaining Nikola workers/shareholders. The CEO (and other executives) have millions of dollars in Nikola stock that they can’t sell because of IPO lockup regulations. As a result, they are attempting to keep the valuation of Nikola stock in the billions so that they can cash out at the end of the IPO lockup period, which ends at around December. Again, this is just my opinion (for legal reasons).

Disclosure: I have no positions in NKLA and do not intend to initiate a position within the next 48 hours.

Previously such tactics were used by creationist against sceptic and atheistic Youtube channels decade ago, and recently by scammers and "fake gurus" for channels exposing them. False DMCAs and false flagging is considers be losers option and show how bad your position really is.

 

[JRP3]

Friends don't let friends buy NKLA!

Indeed. A few months ago when the hype was starting to increase I told my only stock trading friend that it was a fraud and to avoid it at all costs if he had any thoughts about getting in. He knew enough to listen.

 

[HVM]

"Nikola targets critical YouTube accounts in copyright crackdown"
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