Published: September 22, 2023 at 8:59 a.m. ET
Nikola Inc. shares fell on Friday after the electric car maker said it would issue convertible debt, posting its fourth consecutive quarterly loss.
NKLA announced late Thursday that it will issue $40 million in senior notes with an interest rate of 5.0% and a maturity date of September 22, 2024.
Notes can be converted “at any time” into the following currencies:
Nikola Inc. shares fell on Friday after the electric car maker said it would issue convertible debt, posting its fourth consecutive quarterly loss.
company
N.K.L.A.
announced late Thursday that it will issue $40 million in senior notes with an interest rate of 5.0% and a maturity date of September 22, 2024.
The notes may be exchanged “at any time” for common stock, cash, or a combination of both.
Nikola said he expects to close the offering on Friday.
The company’s shares, which have fallen 18.2% in the past three sessions, were down 2.3% in premarket trading on Friday.
The pullback comes after CEO Steve Gursky said the first hydrogen fuel cell truck would be delivered by the end of this month and the company named a chief operating officer (COO). This happened after the stock soared 82.8% in the first session. Managing partner of the special purpose acquisition company (SPAC) that took Nikola public.
Announcements of convertible debt issuances often have a negative impact on a company’s stock price, as shareholders express concerns that their ownership in the company will be diluted if the debt is converted to common stock.
For Nicola, this proposal will help address its financing needs.
In Nikola’s quarterly report filed in August, the company said: ‘Significant doubts’ about ability to continue as a going concern over the next 12 months.
“As an early-stage growth company, the company’s ability to access capital is critical,” the company said. “The company will need to raise additional capital until the company generates sufficient revenues to cover operating expenses, working capital, and capital expenditures.”
The company reported sales of $15.4 million for the three months ended June 30, down from $18.1 million in the same period last year.
The company had cash and cash equivalents of $226.7 million as of June 30, up from $225.9 million as of Dec. 31 but down from $441.8 million a year ago. .
Nikola stock is down 5.8% over the past three months and 39.8% year-to-date. By comparison, the Global
