Nikola Corporation’s shares took a significant dip today in the stock market after the announcement that General Motors would give up their equity stake in the Arizona-based electric truck start up, driving the price down nearly 27% by the close of trading.
Founded by Trevor Milton and named after Nikola Tesla (and not to be confused with Tesla Corporation), Nikola entered into a $2 million deal with GM in September 2020 to form a partnership which would include the production of the Badger pickup truck as well as supplying battery and fuel technologies.
The deal provided GM with an 11% stake in Nikola yet by September 21, 2020 Trevor Milton had resigned after allegations of fraud. (Investigations by the DOJ and the SEC are still underway as of this writing.)
It is important to note that the supply partnership deal between the two corporations remains intact, though it has been revised. GM does appear to be backing out of an equity stake and is not moving forward with production of the Badger pickup which has discouraged investors causing the steep drop in Nokola’s stock.
The new agreement, signed today, in a nonbinding Memorandum of Understanding.
A Memorandum of Understanding (MOU) is written communication expressing the writer’s intention or plan of action or direction. The language used in a Memorandum of Understanding must be carefully considered to avoid any mistake with an actual contract or implied contract. A Memorandum of Understanding may also be referred to as “Letter of Intent,” a “Precontract,” or an “Interim Agreement.” Memorandums of Understanding usually include the details of a proposed deal which are not to be confused with a legally binding agreement. Said memorandums may also include language clarifying that due diligence and/or fulfillment of conditions will precede a final agreement.
Reading a variety of documents is the best way to know which ones will best suit your purposes. RealDealDocs enables you to study documents which have already been successfully implemented. Our database contains millions of contracts, documents, and clauses. And each can be downloaded in MS Word for editing.
Here are several Nikola Corporation documents currently available on RealDealDocs.com:
Nikola Corporation Amendment No. 1 To Registration Rights And Lock-Up Agreement
Nikola Corporation Amendment No. 1 To Registration Rights And Lock-Up Agreement for NIKOLA CORP, ClearSky Power & Technology Fund II LLC, Cowen Investments II, LLC, DFA Ventures, LLC, Green Nikola Holdings LLC, Legend Capital Partners, M&M Residual LLC, Managing Partner VectoIQ, LLC, NIKOLA CORPORATION, T&M Residual, LLC, Thompson Nikola II LLC, Thompson Nikola LLC, VA Spring NM, LLC
Nikola Corporation 2017 Stock Option Plan
Nikola Corporation 2017 Stock Option Plan for VECTOIQ ACQUISITION CORP., NIKOLA CORPORATION
Founder Stock Option Plan
Founder Stock Option Plan for VECTOIQ ACQUISITION CORP., M&M Residual LLC, Nikola Corporation
Sources
Nikola shares crater by 27% after GM gives up equity stake in smaller, reworked deal
Nikola Signs MOU with General Motors