Nikola plans to reverse stock split on a 1-to-30 basis

According to Reuters, electric truck manufacturer Nikola has announced a 1:30 reverse stock split plan, which means that every 30 shares of the company’s existing common stock will be automatically converted into 1 new common stock.

The reverse split is to boost Nikola’s share price to meet the minimum share price requirements for listing on the Nasdaq Stock Exchange and avoid delisting.

, Image source: Nikola,Nikola announced that the company’s shares will begin trading on an adjusted basis for reverse stock splits starting June 25.

After the reverse split, Nikola’s authorized stock will be reduced from 1.

6 billion shares to 1 billion shares.

As of its latest close, the company had issued 1.

36 billion shares with a market value of approximately US$652 million.

Through a reverse stock split, a company can increase its share price by significantly reducing the number of shares outstanding, helping the company avoid possible delisting risks.

Nikola said that due to the uncertain macroeconomic outlook, consumers and businesses reduced consumption of relatively higher-priced electric vehicles and switched to lower-priced hybrid vehicles.

The company delivered a decrease in the number of hydrogen fuel cell trucks in the first quarter, thus failing to meet Wall Street’s revenue expectations for the first quarter.

Although Nikola stepped up production of hydrogen-powered large trucks, its truck revenue fell 26% to $7.

4 million in the first quarter.

Its net loss was $147.

7 million, down from $169.

1 million in the same period last year, thanks to a 15% decrease in the company’s operating expenses.

Nikola’s cash and cash equivalents were US$345.

6 million at the end of the first quarter, down from US$464.

7 million at the end of the previous quarter.

, On June 20, Nikola’s share price fell to 40 cents, a drop of more than 15%, a record low.

Nikola’s share price has fallen by about 45% so far this year.

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Link to this article: https://evcnd.com/nikola-plans-to-reverse-stock-split-on-a-1-to-30-basis/

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