Nikola Motor plummets on possibility of large share sale

Nikola shares dropped as much as 22% to $38 in New York trading, after gaining 373% this year through Friday.Electric vehicle makers have lately caugh
...
This is how Nasdaq welcomed Nikola. (Courtesy: Twitter/@Nasdaq)
This is how Nasdaq welcomed Nikola. (Courtesy: Twitter/@Nasdaq)

Nikola Corp. shares nosedived on Monday as some investors will now be able to buy the company’s stock at a fraction of recent prices.

The electric-vehicle company late Friday said a sale of shares related to certain warrants was declared effective, which means the warrant holders will now be able to acquire one share of Nikola at $11.50 -- a 76% discount to Friday’s close of $48.84.

Also check these Vehicles

Find more Cars
Mg 4 Ev (HT Auto photo)
UPCOMING
BatteryCapacity Icon64kWh Range Icon350 km
₹ 30 - 32 Lakhs
Alert Me When Launched
Tata Sierra Ev (HT Auto photo)
UPCOMING
BatteryCapacity Icon69 kWh Range Icon420 Km
₹ 25 - 30 Lakhs
Alert Me When Launched
Tata Harrier Ev (HT Auto photo)
UPCOMING
BatteryCapacity Icon50 kWh Range Icon400 Km
₹ 22 - 25 Lakhs
Alert Me When Launched
Honda Elevate Ev (HT Auto photo)
UPCOMING
₹ 18 Lakhs
Alert Me When Launched
Tata Punch Ev (HT Auto photo)
BatteryCapacity Icon35 Kwh Range Icon421 km
₹ 10.99 - 15.49 Lakhs
Compare
View Offers
Mg Comet Ev (HT Auto photo)
BatteryCapacity Icon17.3 kWh Range Icon230 km
₹ 7.98 - 9.98 Lakhs
Compare
View Offers

Apart from those nearly 24 million shares that are now exercisable through warrants, the filing also registered as many as 53.4 million shares held by private investors, such as mutual funds and other large institutions.

Also Read : Nikola founder has $7.4 billion fortune on free truck orders

“We believe the potential for a portion of these 77 million shares to hit the market through early investors selling, could create large technical selling pressure on Nikola stock," Deutsche Bank analyst Emmanuel Rosner said in a Monday note to clients.

Nikola shares dropped as much as 22% to $38 in New York trading, after gaining 373% this year through Friday. Electric vehicle makers have lately caught the attention of US investors amid a strong showing from industry front-runner Tesla, which has topped market expectations even as traditional automakers struggled with flailing demand in the pandemic.

While Nikola is still a long way from proving itself, asking customers to put down as much as $5,000 to preorder its battery-powered truck without even seeing a prototype, the company has found some believers. Rosner said the current sell-off could create an attractive entry point into the stock, which is a “rare pure-play on zero-emission commercial trucks, whose adoption is poised to take off."

JPMorgan analyst Paul Coster, who upgraded the stock to the equivalent of a buy on July 8, said that although Nikola is a “story" stock, “we are on board as long as the company executes to plan."

First Published Date: 21 Jul 2020, 12:01 PM IST
NEXT ARTICLE BEGINS

Check Latest Offers

Please provide your details to get Personalized Offers

Choose city
+91 | Choose city
Choose city
Select a dealer

Want to get the best price for your existing car?

Powered by: Spinny Logo
By clicking "View Offers" you Agree to our Terms and Privacy Policy
Dear Name

Please verify your mobile number.

+91 | Choose city
Couldn't verify the OTP.
It's either expired or it's incorrect.