Nikola Falls Apart

Cars and Drivers

Published: June 7, 2023 7:30 am

As Barron’s points out, electric vehicle and hydrogen fuel cell company Nikola Corp. (NASDAQ: NKLA) has fallen apart. Its stock is down 99%. It has imploded and is unlikely to survive. This is another example of a manufacturer that entered a crowded market only to be dismantled as it tried to compete. (These are the most fuel-efficient new trucks this year.)
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Nikola has asked shareholders to allow it to increase the number of authorized shares. Without a shareholder vote in favor, management said the company might not make it as a “going concern,” which means even the people who run the company believe it cannot be salvaged. One incentive to stay with the stock: Nikola said it is about to produce its first hydrogen-powered truck. It is too late for that to matter.

Another attempt to keep Nikola alive was a reverse split so that its share prices could move above the $1 level, which means it could continue to trade on the Nasdaq. Even if it should get there, it does not matter.

Investors could have known a month ago that its financials showed Nikola had run out of time. On revenue of $11,000, Nikola lost $169 million. Its cash reserves were only $121 million. Simple math was all investors needed. For some odd reason, Nikola’s CEO Michael Lohscheller said, “Nikola had a very solid quarter, building sales momentum with Class 8 battery electric truck deliveries to customers, and orders for 140 hydrogen fuel cell trucks from customers.”