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Nikola Stock Soars as Speculative Bets Returns

Investors are piling back into some of the market’s speculative favorites and sending shares of beaten-down hydrogen truck startup Nikola surging.

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Factset chart on Nikola stock

The stock is up about 40% at $1.50 in afternoon trading.

Nikola shares have now nearly tripled over the last seven trading sessions even as the company burns through its cash and struggles to begin manufacturing its fuel-cell trucks. The rally could be a boon for the company if the stock can stay above $1 since it is in danger of being delisted.

Lordstown Motors, another beaten-down clean-tech startup that went public through a special-purpose acquisition company, rose more than 20%. Other companies in the group including QuantumScape and Solid Power are surging this week.

The early-stage companies were investor favorites in 2020 and 2021, then fell out of favor as interest rates rose. A short squeeze is likely contributing to the recent gains with investors who are betting on the stocks to drop nervous about the market’s recent momentum, analysts say.

If the gains persist, they could help the companies survive long enough to take advantage of lucrative government subsidies for clean-energy technologies.

Image: Nikola.inc