EV maker Nikola explores sale, partnerships with cash dwindling
Its shares were trading down 22% as of 3 p.m. on 1/23
Nikola Corp. is exploring options to stave off a cash crunch, including potentially selling parts or all of the company, according to people familiar with the matter.
Other possibilities under consideration include bringing on partners or raising new funds, said the people, who asked not to be identified discussing the private effort. No decisions have been made and management could decide not to take action.
“Despite external headwinds in the EV sector, we have been relentlessly working to raise capital, reduce our liabilities, preserve cash and provide excellent service for our customers,” Nikola said in an emailed statement.
A sale would end a long and difficult saga for the maker of electric and hydrogen-powered semi trucks. Shortly after going public through a blank-check deal in 2020, founder Trevor Milton resigned and was later convicted of defrauding investors about the company’s technology development. Nikola has since cycled through multiple CEOs while battling weak clean-tech sales and a collapsing stock price.
Its shares were trading down 22% as of 3 p.m. Thursday in New York. They lost 95% of their value over the last 12 months.
Chief Executive Officer Steve Girsky, a former Morgan Stanley analyst and General Motors Co. executive who took Nikola public through his special purpose acquisition company, has led the effort to raise money or find strategic alternatives, said the people familiar with the matter.
Nikola said on its October earnings call that its cash at the time was sufficient to fund obligations into the first quarter but not beyond. The company filed to sell up to $100 million of stock in December.
‘Actively Talking’
The company has acknowledged exploring options, without providing specifics. On the October call, Girsky said Nikola was “actively talking to lots of potential different partners who value what we do and value what we’ve built.”
Nikola has sought to bolster its cash for some time, including through several rounds of layoffs.
Some of its financial difficulties stem from issues with its electric trucks. Nikola in 2023 recalled all of the 209 battery-electric big rigs it had sold and temporarily halted sales after an investigation into fires found a flaw in the battery packs. The recall did not impact the company’s hydrogen-electric semi trucks that it had started producing around the time.
— By David Welch and Kara Carlson (Bloomberg)
