Electric vehicle and hydrogen truck manufacturer Nikola has encountered yet another setback as its stock continues to decline. The company received a delisting notice from the Nasdaq stock exchange after its shares traded below $1 for 30 consecutive days. At present, the stock is valued at a mere 59 cents per share. Nikola now has a limited timeframe of 180 days to rectify the situation, a task that appears increasingly difficult.
Nikola’s stock last sold for over $0.99 in the second week of April, shortly after the company issued a recall for a brake pedal defect that could potentially detach in rare cases. This was followed by another recall affecting all Tre BEV trucks due to the risk of unintended rollaway incidents.
Unfortunately, Nikola’s fortunes have not improved significantly since then. The company temporarily halted production on May 9th due to surpassing demand, exacerbating its financial challenges. In the first quarter alone, Nikola reported a loss of $169 million. Consequently, stock prices have plummeted further, intensifying the company’s proximity to potential demise. Despite these obstacles, Nikola maintains an optimistic outlook for the future.
In response to the Nasdaq delisting notice, Nikola stated, “The Nasdaq Notification Letter does not impact Nikola’s listing on Nasdaq at this time.” The company remains committed to enhancing stockholder value and expresses confidence in its mission to pioneer zero-emission solutions. Nikola also expressed its anticipation for the future and its determination to retain its Nasdaq listing.
Nikola’s hopes are pinned on commencing production of its hydrogen-powered Tre trucks in July, which could potentially revive the company’s stock price. However, to improve its position, Nikola will likely have to implement cost-cutting measures. Meanwhile, the company continues its search for cash investments that could provide much-needed support in the foreseeable future.
Another potential avenue to avert delisting is a reverse stock split, a measure previously undertaken by Lordstown Motors after receiving a similar delisting notice. In the event of Nikola’s delisting, shareholders will retain ownership of their stock, but its value is expected to decline even further.
