Nikola, the electric heavy-duty truck manufacturer, made an announcement last Thursday about its plans to raise $100 million in capital. This will be achieved through a public stock offering and a potential private sale of stock to an undisclosed investor.
Citigroup will underwrite the traditional secondary offering, through which Nikola will offer up to $100 million in stock to the public. Citigroup will also have the option to purchase an additional $15 million worth of shares within 30 days.
Nikola has also entered into a forward stock purchase agreement with an unnamed investor, who has agreed to buy the remaining shares at the public offering price if the public offering raises less than $100 million. This way, Nikola will be able to raise $100 million before fees, and the funds will be used for working capital and other general purposes.
In 2022, Nikola produced only 258 battery-electric trucks. However, the company plans to build between 250 and 350 battery-electric semis in 2023, along with 125 to 150 hydrogen fuel-cell-powered trucks set to launch in the fall. The fuel-cell trucks will have longer ranges than the battery-electric versions.
At the end of 2022, Nikola had $233.4 million in cash and equivalents available, down from $315.7 million at the end of September. In the fourth quarter of 2022, the company lost $222.1 million.
Nikola (NKLA) shares initially fell more than 10% in after-hours trading following the announcement. However, they have since rebounded to be down around 6% to $1.31. This price is well off the all-time high of above $65 in June 2020, when former CEO Trevor Milton was at the helm and exaggerating their technology and the capabilities of their Nikola One semi-truck. Eventually, he was found guilty of securities and wire fraud.
