Electric heavy-truck manufacturer Nikola has announced a secondary stock offering of $100 million, but it priced 20% below its Thursday closing price at $1.12 per share. This was met with very limited interest on Wall Street, and Nikola’s underwriter, Citigroup, could only place about a third of the shares with its clients. The remainder of the shares will be bought directly by an unnamed private investor. As a result, Nikola’s shares closed at $1.21 on Friday, down over 13%.
Despite the discounted price, Nikola plans to use the funds raised for working capital and general purposes. The company is also preparing to launch a new long-range electric semitruck powered by hydrogen fuel cells later this year. This new truck will complement Nikola’s shorter-range Tre battery-electric heavy truck, which began shipping last year.
As of December 31, 2022, Nikola had $233.4 million in cash and equivalents available. However, the truck maker lost $222.1 million in the fourth quarter of 2022. Despite this loss, Nikola remains optimistic and focused on expanding its product line and becoming a leader in the electric heavy-truck market.
It will be interesting to see if this offering helps Nikola’s financial position and if the new hydrogen-powered truck generates interest in the market. Nikola remains committed to driving the industry forward and revolutionizing the way we think about heavy transportation. The company is named after Nikola Tesla, who revolutionized the electricity industry over 100 years ago, and Nikola’s mission is to do the same for the transportation industry.