General Discussion Topics, page-198

Yes the GM deal for 11% of Nikola was huge.......Both for EV 's and Tech all the way around. I posted this piece yesterday on a another forum ....so while BOTH GM and Nikola are down today , the longer term earnings accretion is outstanding for GM and their ' New ' EV purpose built and designed truck plant.......

Tech is NOT dead folk's , and it's NOT expensive , it's just ' changing ' ......and taking on different forms.

I say this because a perfect analysis or symmetry would be that on the one hand you have Tesla which has run hard and was off 21 % simply because it misses out on the inclusion in a group of companies being added to the S&P 500 .....but yet on the other hand you have General Motors paying US $2 Billion for an 11% stake in US electric truck manufacturer Nikola who's shares ' rocketed ' 40.8% and pushing it's Market Capitalization to US $18.97 Billion !!

So classic scenario where ' Traditional ' Business .....converges with ' Future ' business . So with GM up 7.9% to a Market Capitalization of US $46.34 Billion off the back of what amounts to an equivalent US$3.39 Billion re-rate or movement in it's SP against an opposite increase in value of US$6.14 Billion in the ' underlying ' business of Nikola. Not a bad return for GM's US$2 Billion if you consider the possibilities that they in fact paid the $2 Billion at the ' Base ' price was US$41.43 per Nikola share.

So that means that around half the gain or 50% of the increase in Nikola's shares to US$50.05 ....which 11% is equal to roughly the US $2Billion paid by GM , has increased increased by approximately $600 million for GM on the Nikola end of the deal ......and a further $3.39 Billion reflected in the gains made through the rising GM share price.

So that's virtually US $4Billion created in value off the original $2 Billion outlaid .....or 100% gain just to start. Now that's what I call ' leverage ' and a really good bit of forward thinking financial engineering