Nikola plans 1-for-30 reverse stock split to comply with Nasdaq listing rules

Nikola

20/06/2024 14:56

June 20 (Reuters) - Nikola  NKLA.O  on Thursday
announced a 1-for-30 reverse stock split to comply with Nasdaq
listing rules.
    The stock will begin trading on a split-adjusted basis
starting June 25, the company said.
    
    WHY IT'S IMPORTANT 
    Through a reverse stock split, a company can shore up its
stock price by drastically reducing the number of shares
outstanding, helping it to avoid being delisted from an
exchange.
    
    CONTEXT
    Nikola missed Wall Street expectations for first-quarter
revenue in May as it delivered fewer hydrogen fuel cell trucks.
Its cash and cash equivalents at the end of the three-month
period ended March 31 stood at $345.6 million, down from $464.7
million in the prior three months.
    
    BY THE NUMBERS
    The number of authorized shares will be reduced from 1.6
billion to 1 billion after the split.
    The company had 1.36 billion shares outstanding and its
market capitalization stood at around $652 million, as of last
close.

    MARKET REACTION
    Nikola's shares fell more than 15% to a record low of 40
cents on Thursday, after tumbling about 45% this year, up to
last close.

 (Reporting by Akash Sriram in Bengaluru; Editing by Anil
D'Silva)
 ((Akash.Sriram@thomsonreuters.com; On X as @HoodieOnVeshti;
+91-74116-87774;))