Nikola, the beleaguered electric truck developer, is at risk of being delisted from Nasdaq, the company disclosed Thursday in a regulatory filing.
Nikola said that on May 24 it received a delisting notice from the public exchange because its share price has been below $1 for the past 30 days. The company has until November 20 to comply with Nasdaq's minimum price rule, which requires the share price to be above $1 for 10 consecutive business days.
Nikola shares were as high as $65.90 in 2020 when the buzzy SPAC was being led by Trevor Milton, the company's co-founder and former CEO, who has been indicted on federal securities fraud. Shares have since fallen 20% to $0.62.
Nikola is among a growing number of companies that went public via a merger with a special purpose acquisition company to see its market cap go into a free fall, and in some cases, land in delisting limbo. Lordstown Motors said this month it also received a delisting notice. The notice, and its failing deal with Foxconn, prompted Lordstown to issue a reverse stock split. Many of these mobility companies were attracted to the capital that public markets can access. And the use of the SPAC as a financial instrument seemed to work at first with many becoming buzzy meme stocks in 2021.
Now the fundamentals are catching up to companies like Nikola as well as other SPACs like Arrival, Bird and Canoo.
Nikola has been working to raise more money by issuing more shares. It is urging shareholders to vote for a proposal that would allow it to increase the number of shares of its company's common stock. The passage of this proposal requires more than 50% of its outstanding shares to vote favorably.