I opened a massive short position on NKLA today after seeing it up almost 10%. Uneducated speculators that have forgotten the lessons of Theranos are fueling its rise, and for them it will end in tears. For me? I will make a fortune.
I hope you are WELL capitalized to prepare for pain. First, this stock has surely reached HTB status (hard to borrow) and so it is going to be very expensive, prohibitively so depending on timing, to borrow these shares for your adventure for any decent amount of time.
And don't worry, you aren't the only person who will be shorting these shares, which means there's gonna be months of fu*kery going on regarding this company and it's stock. There are already people lining up on the other end of this in anticipation of the fun, and when crazy news hits, or something short term favorable happens, the short squeeze will be on. This is where you are going to need to be well capitalized.
I've decided to play this one in the options market with a defined time horizon. Even though, like the borrowing shares market, there is significant expense associated with this trade because of super high implied volatility, I still think there is upside, with defined risk instead of unlimited risk like straight shorting the shares.
I've decided to purchase 1/15/2021 Calls and Puts on this stock, and let it go to zero in the end.
Good luck.
Nikola doesn't even have a functional prototype as far as I'm aware, the best they have is a truck that can drive at what looks like 20mph while towing nothing, and I'm giving them the benefit of the doubt that it is actually running on an hydrogen fuel cell.
A large reason for the market strangeness is the helicopter money from the Fed and the essentially zero interest rate environment. The helicopter money might end soon, but the crazy low interest rates might be here to stay. We might have to redefine what the fundamentals are.
Nikola has no battery edge. Their hydrogen tech is vaporware - after more then 20 years of massive public and private investment in Japan and Germany, Hydrogen failed to achieve a competitive position in the marketplace. Hell, it has been 17 years since Bush Jr announced his plan for a "Hydrogen economy" - nothing materialized.
Hidrogen is dead an buried, not coming back. Nikola has no propulsion in a market where even the company that has the best electric propulsion - Tesla - is struggling to put a compelling semi.
I think the question might just be the ratio of capital.