Electric vehicle and hydrogen hopeful truck manufacturer Nikola is facing a new setback. After trading below $1 for 30 consecutive days, the Nasdaq stock exchange issued a delisting notice to the company. At the time of writing, shares were trading for 59 cents a piece. Now, it has just 180 days to remedy the situation which might prove impossible.
The second week of April was the last time when Nikola’s stock sold for more than .99 cents. That wasn’t long after it issued a recall for a brake pedal that could, in rare instances, fall off. It wasn’t long before it issued another recall of every Tre BEV truck it had made over the risk of unintended rollaway.
Since then, the news hasn’t improved much. It halted production temporarily on May 9th since it had outpaced demand. It didn’t help that it lost $169 million during the first quarter. Stock prices slid even further and now, the delisting notice puts Nikola even closer to the brink of demise. Despite that, the company seems optimistic about its future.
Read: EV Startups Fisker, Lucid And Nikola Stumble As Q1 Results Underwhelm And Share Prices Slide
“The Nasdaq Notification Letter does not impact Nikola’s listing on Nasdaq at this time,” the company said in an email to Barrons. “Nikola is committed to increasing stockholder value…we remain confident in our mission of pioneering solutions for a zero-emissions world and look forward to the future, and maintaining our Nasdaq listing.”
It’s hopeful that it can begin production of its hydrogen-powered Tre in July. That could bring a much-needed uptick in stock price but Nikola will almost certainly have to cut costs somewhere to improve its position. For the time being it’s continuing to seek out cash investments that could buoy it for the foreseeable future.
Another option to avoid delisting could be a reverse stock split which is what Lordstown did last month after receiving a similar delisting notice. Should Nikola end up getting delisted shareholders will continue to own that stock but its value will likely be diminished even further.
