Nikola is an American automotive company focusing on creating zero-emission trucks. It was founded in 2014 and is based in Phoenix. Like Elon Musk’s popular electric car company, Tesla, Nikola is named for famous inventor Nikola Tesla, though it has no actual connection to the man. Though Nikola has produced several interesting vehicle concepts, it came under investigation by the SEC in September 2020 for allegations of securities fraud. Still, if you’re interested in investing in the future of transportation, Nikola is one place to look. For more comprehensive, personalized advice on investing, consider working with a financial advisor.
How to Buy Nikola Stock With a Brokerage Account
The easiest way to buy stock in Nikola is to use a brokerage account. This gives you the ability to buy and sell stocks of Nikola and many other companies. To buy Nikola, you’ll need to use the ticker the company lists with on the NASDAQ, which is NKLA.
Once you make a brokerage account, you’ll place either a market order or a limit order for your Nikola stock. A market order allows you to simply buy the shares at the current price. A limit order, on the other hand, lets you set a maximum price you are willing to pay. If and when the stock reaches that price, your order will proceed.
With a brokerage account, you’ll also be able to purchase other stocks, bonds, mutual funds, exchange-traded funds (ETFs) and other investment securities. There are a number of brokerage platforms out there to start an account through, so make sure to carefully pick the right platform for you. Here are some popular options:
Comparison of Brokerage Accounts
|Brokerage Firm||Commissions||Minimum||Best For|
|None||None||– Mobile/online traders|
– Self-sufficient investors
|Free stock, ETF and options trades||None||– Bank of America customers|
– Investing newbies
|Free stock, ETF and options trades||None||– Sophisticated online traders|
– New investors who can afford to pay for assistance
How to Buy Nikola Stock With a Financial Advisor
While you can certainly buy shares of Nikola on your own, it can’t hurt to get a little bit of help. A financial advisor can help you form a larger financial strategy that will work for you and your family. If you want that plan to include investing in Nikola, just bring it up to your advisor and they’ll make sure it gets done. They can also tell you when its time to sell your shares, which can be a complicated decision due to taxes.
The market can change quickly, so investors need to be on top of their portfolio. With a financial advisor, though, you have a professional who can do that for you, reacting to market fluctuations and making sure your investment portfolio always aligns with your goals.
Company Overview of Nikola
Based in Phoenix, Nikola has shown several concepts for zero-emission trucks. To be clear, the company has not actually gone to production on any of its concepts yet, as it’s aiming to start production in 2023 and 2024. So anyone looking to invest in Nikola would be making a very long play. The idea is essentially that the company ends up able to produce and sell its trucks down the road.
The following concepts have been created by the company:
- Nikola One: a hydrogen-fueled Class 8 truck
- Nikola Two: a semi-tractor truck similar the Nikola One, but without a sleeper compartment
- Nikola Tre: an electric truck aimed at the European, Australian and Asian markets
Other concept vehicles have been developed and presented only to be canceled by the company. In turn, the company has squarely focused itself on the trucking industry.
Nikola’s Stock Price and Quality
Nikola is a very young company, and one that has had issues in recent years. Anyone investing in the firm should firmly believe in the mission of creating zero-emission vehicles and be willing to sit with the investment for some time. That’s because it will likely be a number of years before any sort of profit starts to come in.
As of June 2021, shares of Nikola were selling at around $15.60. That is significantly down from it’s all-time high of $65.90 around a year ago.
What happened over the course of that year to cause such a precipitous drop? In short, it was prompted by allegations of fraud involving the company misleading investors about the technology at the firm. The founder of the company, Trevor Milton, resigned in September 2020. Nikola pushed back against the allegations and is still in business, but the share price has not yet recovered.
Is Nikola Stock Right for You?
As noted above, Nikola is not a blue-chip company. It’s a young business that has not begun production on any products yet, and has had allegations of fraud from some of its investors. Therefore, it’s not likely the right investment choice for someone who wants something safe and highly likely to grow in value.
In other words, someone looking to build a retirement nest egg might want to look elsewhere. An investor who’s interested in zero-emission vehicles and who can take a risk, though, might find Nikola to be right for them.
Nikola stock, like all stocks, are inherently riskier than, say, ETFs. That’s because you’re betting on a single company to perform strongly rather than an entire market, which is what ETFs go for. However, that doesn’t mean that Nikola stock is an unfitting investment, as higher return potential inherently comes with higher risk.
Regardless of whether Nikola becomes a part of your investment portfolio or not, be sure to really do your research. Placing your hard-earned cash into a company is a major decision, so be deliberate with your choice.
Tips to Become a Better Investor
- Working with a financial advisor is a good idea no matter how you want to invest. Finding a financial advisor doesn’t have to be hard, though. In fact, SmartAsset’s free tool connects you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors, get started now.
- Asset allocation is the key to building a successful portfolio. Your ideal asset allocation will change as you get older, so it requires adjustment as the years roll by. Use SmartAsset’s asset allocation calculator to get started today.
Photo credits: Nikola, Yahoo Finance, ©iStock.com/Orientfootage