The South Korean partner Hanwha is selling up to half of its 5.65% stake in the company
The shares of Nikola Corporation (NASDAQ: NKLA) fell 5.8% to $ 15.43 on its last review after South Korean strategic partner Hanwha decided to sell up to half of its 5.65% stake in the company this year. That equates to about 11.1 million shares, or $ 180 million, based on the final close of the electric vehicle’s name. A Hanwha spokesman added the company will use the proceeds to invest in hydrogen-related businesses.
Despite attempts at rallies in September, November and January, the stock has fallen on the charts since June 9, hitting a record high of $ 93.99. The stock is now trading more than six times lower than that high and has consolidated below the $ 18 level. Longer term, Nikola stock has shaved 74.4% in the past nine months.
Analysts are hesitant about safety, with six of the eight in question having a lukewarm “hold” rating while the remaining two say “strong buy”. However, the 12-month consensus target of $ 27 represents a premium of 77.8% over current levels, indicating that price cut cuts could be on the horizon for NKLA.
Meanwhile, short sellers have flocked to the exits. Short rates fell 20.6% over the last two reporting periods, but the 30.55 million shares sold still account for a whopping 18.6% of the stock’s available free float.
So far, 9,637 calls have been exchanged, which is twice the intraday average and more than twice the number of puts traded. The most popular is the weekly 3/26 18-strike call, followed by the March 15th put. Buyers of the latter expect further disadvantages for NKLA by the end of Friday, when the contracts expire.
Now could be a good time to weigh the stock’s next move against options. The Schaeffer volatility index (SVI) of the security of 96% is above 11% of all other values of the past year. This suggests that options players are currently pricing in lower than usual volatility expectations.