Daily BriefsUnited States

United States: Nikola Corp, GoodRx Holdings Inc, Crude Oil and more

In today’s briefing:

  • Nikola’s Founder Resigns – The Next Enron?
  • Nikola:A Winning SPAC Story Turning Into Greek Tragedy & A Shot Across the Bows for SPAC Investors
  • GoodRx IPO: A Healthy Prescription for Strong Topline Growth and Profits
  • Weekly Oil Views: Caught Between Saudi Jawboning, Demand Doubts and the Libya Factor

Nikola’s Founder Resigns – The Next Enron?

By Douglas Kim

In this insight, we provide our thoughts on the resignation of Nikola Corp (NKLA US) founder Trevor Milton, who will be replaced by Stephen Girsky, a former GM executive who already sits on Nikola Corp’s board. On 10 September, a firm called  Hindenburg Research published a report that harshly criticized the company. We are interested in Nikola mainly because a Korean company called Hanwha Solutions (009830 KS)’s stock price has been highly impacted by Nikola’s share price recently.

In our view, Hindenburg Research makes legitimate criticism of Nikola Corp and its founder Trevor Milton. Nikola Corp has come out with a rebuttal but we do not believe this is enough to calm investors and customers. Regarding Nikola Corp, it all comes down to whether or not the company has its own unique hydrogen-based technology which it claims it does. Nikola Corp needs to hire a well-respected third party agent and give sufficient proof that its technology really works. 

Investors are waiting for the confirmation of an independent third party test of its technology. If the company is unwilling to provide such tests and continues to delay such tests, we believe this could have a further negative impact on Nikola Corp and its major investors including Hanwha Solutions. 


Nikola:A Winning SPAC Story Turning Into Greek Tragedy & A Shot Across the Bows for SPAC Investors

By Robert Sassoon

A few weeks ago, Nikola Corp (NKLA US) was seen as a winning SPAC related investment, but the NKLA  story has yet to fully unfold. We rate the risks of further fall-out high. Moreover,  NKLA’s potential fall from grace could have wider ramifications for SPACs in general which until now appeared to have secured their claim for  greater legitmacy as an investment class.


GoodRx IPO: A Healthy Prescription for Strong Topline Growth and Profits

By Shifara Samsudeen, ACMA, CGMA

GoodRx (GDRX) offers a prescription aggregation platform in the US enabling healthcare professionals to provide prices from the platform directly to their patients at the point of prescribing. In addition, the company also offers telehealth services since 2019 through its own platform HeyDoctor and GoodRx telehealth marketplace.

The company has filed for an IPO in the US and intends to raise around US$900m. In addition, GoodRx will also raise US$100m from a private placement from Silver Lake concurrent to its IPO.

A majority of the recent IPOs in the US commanded lofty valuations despite them making massive losses while some of them did not even have a proper path to profitability. However, GoodRx has strong financials with a growing top line and track record of profits, and the company dominates a growing market.

We discuss the details below.


Weekly Oil Views: Caught Between Saudi Jawboning, Demand Doubts and the Libya Factor

By Vandana Hari

Saudi oil minister Prince Abdulaziz bin Salman’s unexpected jawboning injected some additional momentum into crude’s price recovery last week. 

At the close of last week, Brent futures had reclaimed 55% of the ground lost during the three-week tailspin that started right after it hit five-month highs on August 25. WTI, supported a bit more by US offshore production shut-ins in an unusually busy Atlantic hurricane season, had recovered two-thirds of its losses.

The Saudi minister and the USG shut-ins temporarily shifted market attention to tightened supply, but we expect the global oil demand outlook to stay in the driver’s seat and remain vulnerable to bouts of doubt.


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