Nikola, the truck maker that specializes in electric and hydrogen freight haulers, is currently facing the risk of delisting from the Nasdaq stock exchange. The company’s CEO, Michael Lohscheller, mentioned during a fireside chat that if necessary, the brand could implement a reverse stock split to address the issue. However, the company is aiming to regain compliance with Nasdaq’s listing requirements before the deadline without resorting to a stock split.
The Nasdaq stock exchange requires that all shares trade at or above $1. Should a share drop below that price for more than 30 straight days, it’ll send a delisting notice to the company in question. That’s what happened with Niokla recently. At that stage, the company has 180 days to get its share price back to $1 or higher and it must maintain that price for 10 consecutive days.
While it’s plausible that Nikola could ask for an extension and aim to meet other requirements, the best-case solution is to regain compliance the normal way, with increased value in the company. To that end, Lohscheller said that despite having to make tough decisions in “challenging times” that the team believes it can regain compliance.
More: Nikola Halts Electric Truck Production After Disappointing Sales And $169M Losses In Q1 2023
If it can’t manage to achieve that feat, Lochscheller confirmed that Nikola would indeed do a reverse stock split to increase its share price. That’s the exact same road that Lordstown Motors took when it received a similar delisting notice from the Nasdaq for the same low share price issue.
All of this is going on as Nikola is hoping that its new hydrogen-fuel-cell Tre big rig will boost the brand. It stopped producing the all-electric version of the Tre because it had more finished trucks than it did orders. At the time, it decided to only build the electric version to order. Now, it’s in the process of retooling its production line so that it can build either of its heavy-duty trucks.
Lohscheller encouraged shareholders to vote yes on a proposal that will increase the number of shares that the brand is allowed to use. That would create more cash for Nikola to use as it strives to get fully rolling.
