PHOENIX, AZ – Nikola (NASDAQ:NKLA) Corporation (NASDAQ:NKLA), a manufacturer specializing in zero-emission vehicles, has updated its equity distribution agreement with Citigroup Global Markets Inc., according to a recent SEC filing. The amendment, effective Thursday, allows the company to sell common stock shares totaling up to $237.6 million, which represents the remaining portion of a $600 million offering previously authorized.
The amended agreement enables Nikola to conduct "at-the-market" offerings, as defined by SEC rules, where shares are sold over time at prevailing market prices. The company will pay Citigroup a 2.5% commission on gross proceeds from these sales. While Nikola has the discretion to sell shares under this arrangement, it is not obligated to do so and may suspend sales at any time. The agreement can be terminated by either party without any liability.
This move comes as part of Nikola's ongoing efforts to strengthen its financial position and support its operational goals. The shares in question will be offered under Nikola's existing shelf registration statement, which was declared effective by the SEC on August 28, 2024, and includes a prospectus supplement dated October 31, 2024.
In other recent news, Nikola Corporation's Q3 financial report revealed a widened loss, with a per-share deficit of $2.75, surpassing the average analyst prediction of a $2.35 loss. The company's quarterly revenue stood at $25.2 million, falling short of the projected $37.2 million.
Despite these financial challenges, Nikola has maintained its production outlook for the year, aiming to produce between 300 and 350 fuel-cell powered electric trucks. In recent developments, Southern California dealership GTS Group launched a new division, Next Generation Truck, to sell and service Nikola's zero-emission Class 8 trucks, expanding Nikola's sales and service locations to nineteen across the United States. Nikola's Q3 results also showed a 22% increase in hydrogen truck deliveries, hitting its target with 88 units sold.
However, DA Davidson recently revised Nikola's stock outlook, lowering the price target from $12 to $10, citing concerns about the company's financial trajectory. Nikola's founder, Trevor Milton, was ordered to pay $167.7 million due to misleading public statements about the company's operations.
Despite these developments, Nikola remains committed to its mission of advancing zero-emission solutions in commercial transportation.
InvestingPro Insights
Nikola Corporation's recent move to update its equity distribution agreement aligns with its current financial situation, as revealed by InvestingPro data. The company's market capitalization stands at $214.03 million, reflecting its position in the competitive zero-emission vehicle market.
Two relevant InvestingPro Tips shed light on Nikola's financial health:
1. "Quickly burning through cash" - This tip underscores the importance of the updated equity distribution agreement, as it provides Nikola with a potential source of additional funding.
2. "Trading near 52-week low" - With the stock price at $4.23, only 10.26% of its 52-week high, this tip indicates the challenging market conditions Nikola faces.
These insights, along with 16 additional tips available on InvestingPro, offer a comprehensive view of Nikola's financial landscape. The company's revenue for the last twelve months as of Q2 2024 was $48.62 million, with a concerning gross profit margin of -567.8%. This data further contextualizes Nikola's need for financial flexibility through the amended agreement with Citigroup.
Investors considering Nikola's stock may find the InvestingPro Fair Value of $5.99 useful in their analysis, especially given the current market dynamics and the company's strategic financial moves.
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