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Nikola Corp. witnessed a significant decline in its shares following the announcement of plans to issue $100 million in new shares and $200 million in green convertible senior notes due in 2026. The Phoenix-based electric vehicle manufacturer disclosed its intentions in a securities filing, outlining the allocation of funds for working capital, general corporate purposes, and projects aligned with the Green Bond Principle guidelines. Additionally, the underwriters have the option to access an additional $15 million in stock and $30 million in notes.
As a result of this announcement, Nikola’s shares experienced a 19% drop to $0.80, recovering from an initial decline of up to 29%. The company has faced a series of challenges throughout the year, including internal management issues and operational difficulties with its all-electric trucks. The recent resignation of its chief financial officer added to the company’s woes. Nikola’s stock had already seen a decline of 55% earlier in the year as of the previous close.
The move to raise funds through new shares and convertible notes comes at a critical juncture for Nikola, which reported cash and cash equivalents of $392 million at the end of the last quarter. The funds raised are expected to support the company’s financial needs, especially amid the ongoing challenges it faces in the electric vehicle market.
