Nikola deal with GM being mischaracterized, is a positive, says Cowen

Cowen analyst Jeffrey Osborne keeps an Outperform rating on Nikola (NKLA) with a $47 price target after the company announced a non-binding global supply agreement with General Motors (GM). The press and investors are mischaracterizing the situation, Osborne tells investors in a research note. The analyst sees the deal as a positive development since it reduces dilution and cash burn and focuses management on a "complex ramp of production" of both fuel cell electric vehicles and battery electric vehicle Class 8 trucks. While the prior deal called for Nikola to give $2B in stock to GM, this deal does not, which is a positive, according to Osborne. The analyst points out that GM was never buying $2B of stock as the company was getting it for free under the prior proposed arrangement. Nikola also reiterated its previously announced timeline for its semi-trucks, adds Osborne.