Embattled electric vehicle (EV) maker Nikola (NASDAQ:NKLA) is once again trending downward today. Unfortunately for investors, the incredible 12% downside move in NKLA stock as of this writing is a result of rather bleak news from the company’s headquarters in Phoenix, Arizona.
Specifically, Nikola reported on Friday that it suspects foul play was involved in a fire at the company’s headquarters. This fire, which “affected multiple battery electric trucks,” took place a week after the company laid off 270 employees. Thus, Nikola management appears to believe that someone affected by or tied to the layoffs may be involved. Notably, a vehicle was spotted immediately before the incident took place, prompting the suspicion.
Let’s dive into what this news means for Nikola shareholders — and why NKLA stock is down so much on this news.
Why Is NKLA Stock Down Today?
With an investigation ongoing, it’s unclear how long it will take for investors to have clarity on this incident. Notably, this news is already rocking NKLA stock on Friday. Today’s move seems to reflect a continuation of the stock’s downside momentum.
Nikola is one of the EV stocks that has been hit very hard by a series of macro and company-specific concerns. Given the company’s ongoing production issues, a fire affecting even a few vehicles may impact its upcoming numbers in a material way. Thus, some of today’s move appears to be tied to the expected fundamental impact of this incident in the coming quarterly report.
This incident appears to be a one-off situation. But it’s also just the latest in a string of issues plaguing Nikola. Accordingly, investors appear to be using the news as another reason to bail on NKLA stock today. It’s hard to blame them.
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On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
