(Reuters) –Nikola Corp shares fell over 10% to a seven-month low on Wednesday after the company terminated a deal with Republic Services Inc to develop electric garbage trucks for the recycling and waste disposal firm.
The announcement furthers a tumultuous year for the electric-truck maker, which has been in the limelight ever since a short-seller accused it of fraud in September, leading to the resignation of founder Trevor Milton. Nikola has denied all the allegations.
Nikola said on Wednesday a previously announced here order for 2,500 trucks from Republic in August, when the companies joined hands, has been cancelled.
“This was the right decision for both companies given the resources and investments required,” Nikola Chief Executive Mark Russell said.
Cowen and Co analysts, however, termed the cancellation as positive for Nikola.
“We like management’s exit from expensive and costly non-core initiatives in the post-Trevor Milton era,” the brokerage said in a note.
The company’s stock slumped 25% on Nov. 30, after General Motors Co walked back from an original agreement to take an equity stake in the startup, and instead said the companies will work together on a fuel-cell partnership.
Nikola shares have lost 60% of their value since September 10, when Hindenburg Research shorted the stock and labeled the electric truck maker a “fraud” in a scathing report. It also accused Milton of nepotism.
Republic said on Wednesday it was continuing its electric-vehicle partnerships with Volvo Group’s unit Mack Trucks and PACCAR Inc-owned Peterbilt, and plans to make additional purchases from various suppliers next year.
Reporting by Ayanti Bera and Munsif Vengattil in Bengaluru; Editing by Ramakrishnan M.