PHOENIX, AZ - Nikola (NASDAQ:NKLA) Corporation (NASDAQ:NKLA), a company specializing in the design and manufacture of electric vehicles, announced a 1-for-30 reverse stock split of its common stock, set to take effect after market close on June 24, 2024. This decision follows the approval from its stockholders at the annual meeting on June 5, 2024, and subsequent ratification by the Board of Directors on June 13, 2024.
Starting June 25, 2024, Nikola's common stock will trade on the Nasdaq on a split-adjusted basis under the existing ticker symbol NKLA, with a new CUSIP number 654110303. The reverse stock split will consolidate every thirty shares of issued common stock into one share.
The company stated that no fractional shares will be issued; shareholders who would hold a fractional share will receive a cash payment instead, proportional to their share in the net proceeds from the sale of the aggregated fractional shares.
The reverse stock split is aimed at reclassifying and reducing the number of Nikola's outstanding shares. It will also trigger proportional adjustments to the number of shares underlying the company's outstanding equity awards, warrants, and convertible notes, as well as the exercise or conversion prices associated with these instruments. Additionally, the number of authorized shares of common stock will be reduced from 1,600,000,000 to 1,000,000,000.
Nikola has emphasized that the reverse stock split will affect all shareholders uniformly and will not alter any shareholder's percentage ownership of the company, except for minimal changes due to the elimination of fractional shares.
Shareholders with stock in certificated form will receive instructions from the exchange agent, Continental Stock Transfer & Trust Company, on how to exchange their pre-split shares. Those with shares held in book-entry form or through a broker, bank, or nominee will see their shares automatically adjusted to reflect the reverse stock split.
This strategic move is based on a press release statement and is intended to enhance the corporate structure of Nikola as it continues to navigate the electric vehicle market.
In other recent news, the electric vehicle startup, Fisker Inc. (OTC:FSRNQ), has filed for bankruptcy protection after facing challenges such as fundraising difficulties, slow sales, and supply chain issues.
In contrast, Nikola Corporation secured a significant order of 100 hydrogen fuel cell electric trucks from AiLO Logistics, marking a substantial move in the trucking industry's shift towards decarbonization. However, Nikola's stock price target was recently reduced to $0.50 by TD Cowen following a disappointing first quarter for 2024.
Meanwhile, Nikola has expanded its hydrogen refueling station network with a new facility in Long Beach, California, under its HYLA brand. This is part of the company's plan to establish up to nine refueling stations by mid-2024. In the broader U.S. EV startup landscape, Rivian (NASDAQ:RIVN) Automotive Inc. and Lucid Group Inc. (NASDAQ:LCID) have undertaken measures to cope with demand downturns and high borrowing costs.
These are recent developments in the EV industry, providing a snapshot of the current state of affairs. It's important to note that these updates reflect the views and analysis of various market analysts and not the views of this publication.
InvestingPro Insights
As Nikola Corporation (NASDAQ:NKLA) prepares for its reverse stock split, investors are closely monitoring its financial health and market performance. According to real-time data from InvestingPro, Nikola's market cap stands at a modest $652.37 million. The company's revenue for the last twelve months as of Q1 2024 was $32.66 million, which, while significant, reflects a decrease of 44.19% in revenue growth. This contraction underscores the challenges Nikola faces in the competitive electric vehicle market.
InvestingPro Tips suggest that while Nikola holds more cash than debt on its balance sheet, it is quickly burning through cash, which could raise concerns about long-term sustainability. Analysts do not anticipate the company will be profitable this year, and the stock price has been highly volatile, currently trading near its 52-week low. However, on a more positive note, the company's liquid assets exceed its short-term obligations, providing some financial flexibility in the near term.
For investors seeking a deeper analysis, there are additional InvestingPro Tips available, offering a comprehensive look at Nikola's financials and market prospects. By using the coupon code PRONEWS24, investors can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking valuable insights that could inform investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.