Nikola, the beleaguered electric truck developer, is at risk of being delisted from Nasdaq, the company announced in a statement Thursday. regulatory submission.
Nikola said it received notice of delisting from the public exchange on May 24 because its stock price has remained below $1 for the past 30 days. The company has until Nov. 20 to comply with Nasdaq’s minimum price rule, which requires the stock price to exceed $1 for 10 consecutive business days.
Shares fell 20% to $0.62. Nikola shares were as high as $65.90 in 2020 when the bustling SPAC was led by Trevor Milton, the company’s co-founder and former CEO who has since been indicted on federal securities fraud charges.
Nikola is one of a growing number of companies that went public through a merger with a special purpose acquisition firm to see its market cap go into free fall and in some cases into limbo. Lordstown Motors said this month it also received a delisting notice. The notice and the failed deal with Foxconn prompted Lordstown to execute a reverse stock split. Many of these mobility companies were attracted to the capital that public markets have access to. And using the SPAC as a financial tool initially seemed to work, with many becoming buzzy meme stocks in 2021.
Now the fundamentals are catching up with companies like Nikola and other SPACs like Arrival, Bird and Canoo.
Nikola has been working to raise more money by issuing more shares. It urges shareholders vote for a proposal which would allow it to increase the number of common shares of its company. The approval of this proposal requires that more than 50% of the outstanding shares vote positively.