Why Nikola Stock Dropped on Dec. 30, 2022
Hydrogen fuel cell truck making start-up Nikola (NASDAQ: NKLA) announced plans this morning to raise cash by selling up to $125 million in senior convertible notes (i.e., debt that is convertible into common stock).
Nikola stock tumbled 4.8% through 11 a.m. ET on the news.
The company laid out its intentions in an 8-K filing with the Securities and Exchange Commission. Nikola plans to sell $50 million worth of convertible notes today, but will collect only $46.5 million of that after expenses. It may or may not raise an additional $75 million (before fees) over the course of the next year by selling the balance of the $125 million worth of notes. Nikola notes that this sale is being made directly to a group of (unidentified) buyers, without underwriters or other intermediaries (which raises the question of where exactly $3.5 million from the initial offering is going).
Source Fool.com
