Investors pummel Nikola shares after new stock and debt sales

Nikola is offering 133.3 million new shares at 75 cents each and issuing $175 million in new debt to scale its fuel cell truck business.

What happened

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Why it matters

Investors dumped Nikola stock Friday after the electric truck maker priced the sale of 133.3 million new shares and sought to issue $175 million in new debt with an annual interest rate of 8.25%.

The new stock sale would raise to nearly 1 billion the number of outstanding shares in the company. Shareholders voted in August to double the number of authorized shares to 1.6 billion from 800 million, effectively agreeing to dilute the value of their holdings as new shares are issued.

The company already has a notice of going concern on file with the Securities and Exchange Commission. It said in a Feb. 23 filing that it may run out of money in the next 12 months and have to “modify or terminate” its business.

This news brief is based on reporting published by FreightWaves on 2023-12-08. The original report is linked below.