Nikola’s Plunge Takes Norwegian Green Energy Stock Down Too
Nikola’s Plunge Takes Norwegian Green Energy Stock Down With It
(Bloomberg) -- Nikola Corp.’s latest stock plunge sent shares of Norwegian green energy company Nel ASA to a nearly 17% drop Monday.
The Oslo-based company is critically tied to Nikola, which is set to be a major buyer of Nel’s technology to create hydrogen.
Earlier this year, Nikola made a more than $30 million order for Nel’s electrolyzers that would create the hydrogen to refuel a future fleet of emissions-free trucks. It was the biggest order on Nel’s order book that it highlighted in a presentation to investors earlier this year.
“These electrolyzers will support five heavy-duty hydrogen stations which will cover multiple states and trucking routes in the USA,” Trevor Milton, Nikola’s founder and then-executive chairman said in June. “The future of clean transportation is here, and fleets are lining up to be part of the transition with Nikola.”
The order was one of the key reasons why Nel decided to build a giant electrolyzer factory in Norway, Jon Andre Lokke, Chief Executive Officer said in the June press release. Another order was expected to be finalized in the months after.
Lokke said by email that work on the first order continues as normal and that work continues on the technical details of the subsequent deal.
“Nikola stays committed to their overall strategy and the commitment to Nel, that is our clear impression,” Lokke said.
The market had been waiting to hear more details about Nikola’s plans for hydrogen filling stations, according to Tomas Skeivys, an analyst who covers Nel for Norne Securities in Lithuania.
“The speed of the station roll out will be key to Nel,” Skeivys said by phone. “The risk is high that now that Trevor Milton’s gone, maybe that time line will be revised.”
Nel also owns over 1.1 million shares in Nikola, which it can’t sell until a lock-up period expires at the end of November, according to company filings.
Nel is still well positioned to profit from the boom in hydrogen. The company’s stock is up more than 80% this year. Europe’s other listed electrolyzer companies also fell Monday amid a a broader decline in Europe’s stock market. The U.K.’s ITM Power Plc was down 8% and McPhy Energy SA declined almost 10%.
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