Shares of Nikola Corporation took a nosedive, after the electric vehicle manufacturer unveiled its plans to issue $100 million in new shares and $200 million in green convertible senior notes due in 2026. The Phoenix-based company disclosed this strategic move in a securities filing late Wednesday, outlining intentions to allocate the raised capital towards working capital, general corporate purposes, and unspecified projects in alignment with the Green Bond Principle. Additionally, underwriters have the option to access an extra $15 million in stock and $30 million in notes, according to the filing.
The announcement follows a turbulent year for Nikola, with shares already witnessing a 55% decline prior to Wednesday’s market close. The stock had initially plummeted by as much as 29% before partially recovering to the aforementioned 19% dip by 5:14 p.m. in New York.
At the time of this publication, Nikola Corp stock (NKLA) has witnessed a decline.
Nikola Corp
Current Price: $0.83
Change : -0.15
Change (%): (-15.76%)
Volume: 127.5M
Source: Tomorrow Events Market Data
Nikola’s financial maneuvering comes on the heels of a successful third quarter in which the company secured $250 million, bolstering its unrestricted cash position by $136.2 million. The recent financial boost was highlighted in the company’s latest earnings release, where Nikola proudly revealed a threefold increase in unrestricted cash since the first quarter of the year.
However, the electric vehicle manufacturer has been grappling with a series of challenges, including internal upheavals and operational setbacks. Last month, Nikola saw the resignation of its Chief Financial Officer, adding to the managerial turmoil that has plagued the company. Operational challenges with its all-electric trucks and a series of job cuts further contributed to its struggles.
In the face of adversity, Nikola reported cash and cash equivalents of $392 million at the close of the last quarter. The infusion of $300 million from the latest capital raise is expected to provide some relief and support the company’s efforts to navigate through a challenging period.
In the wake of Nikola Corporation’s announcement of new shares, the company faces an uncertain future as investors grapple with the implications of its financial maneuvers on the electric vehicle manufacturer’s trajectory.
