Why Nikola Stock Soared 121% Last Month
Shares of clean-energy vehicle maker Nikola Corporation (NASDAQ: NKLA) surged over 120% in June, according to data provided by S&P Global Market Intelligence. The heavily shorted stock announced it had a plan to reduce its cash burn and is trying to secure authorization from shareholders in order to increase its total number of shares outstanding. As of this writing, shares of Nikola are still down 35% year to date (YTD) and 85% since going public in 2020.
Nikola was a popular special purpose acquisition company (SPAC) merger started by Trevor Milton, who turned out to be a fraudulent promoter. Milton was caught red-handed pretending to drive a hydrogen-powered Nikola vehicle, but in reality, he was sitting in a vehicle rolling down a hill. Nikola has since struggled to bring real products to market.
After Milton was exposed as a fraud, he left Nikola and was replaced by automotive veteran Michael Lohscheller. Since then, Lohscheller and the new team have tried their best to keep Nikola alive and bring some products to market. But electric and hydrogen-fuel vehicles are incredibly difficult to manufacture. Last quarter, Nikola had total revenue of just $11 million and burned over $200 million in free cash flow.
Source Fool.com
