- SPAC
- May 26, 2023
- 3 minutes read
Electric Truck Maker Nikola Receives Nasdaq Delisting Notice
Nikola (NASDAQ: NKLA), the embattled electric truck maker, is facing yet another problem. The company has received a delisting warning…
Nikola (NASDAQ: NKLA), the embattled electric truck maker, is facing yet another problem. The company has received a delisting warning from the Nasdaq stock exchange for failing to meet its listing requirements.
Nikola revealed in a Thursday regulatory filing that it received a delisting warning because its shares traded below $1 for the preceding 30 days. The company has 180 calendar days (until November 20, 2023) to comply with the $1 minimum price rule or risk a delisting.
Nikola currently trades at around $0.60 with a market value of $422mn, a far cry from its peak $34bn market value in 2020. Once a high-flying company, it came crashing down after revelations of fraud and long-running deception. Nikola founder Trevor Milton was indicted, tried, and convicted of one count of securities fraud and two counts of wire fraud for lying to investors. He’s currently free on a $100mn bond and awaiting sentencing on June 21, 2023.
- Milton resigned from Nikola in July 2021 after allegations of fraud from Hindenburg Research, a famous short-selling investment fund. He was indicted that same July and convicted in October 2022 following a four-week trial.
- Nikola, the company, was also indicted by the U.S. Securities and Exchange Commission (SEC) for defrauding investors and paid a $125mn fine.
After resigning, Milton was replaced in the chief executive role by Mark Russell, who joined Nikola in 2019 as President. Russell stepped down this January and was replaced by Michael Lohscheller, former chief executive of Opel, a German automaker, and VinFast, a Vietnamese electric carmaker.
Nikola has chugged along under Loscheller’s leadership but on a smaller scale. The company has delivered over 160 Tre electric trucks to dealers. However, Nikola is far from making a profit; it reported a $169mn net loss on $11mn in revenue in this year’s first quarter. It has reported $2.1bn in losses on a comparably small $62mn in revenue from 2019 to date.
- The delisting warning doesn’t spell doom for Nikola. The company could hold a reverse stock split to increase its share price above the $1 level. For example, a 10:1 reverse stock split could combine ten Nikola shares currently worth $0.60 into a single share worth $6. Yet, a stock split won’t save Nikola’s ailing business.
