Why Nikola Stock Tumbled Today
Investors are punishing Nikola (NASDAQ: NKLA) today, plunging the stock below $1 per share. A company announcement has investors losing confidence in the electric heavy-truck maker's chances for survival. The stock plummeted 23.5% in early trading before settling in with a decline of 17.6% as of 10:40 a.m. ET.
The drop is due to Nikola's latest announcement that it is seeking to raise more money through new offerings of both common stock and convertible senior notes. The company expects to raise $100 million through the stock sale and another $200 million from the sale of convertible bonds.
Current shareholders will own less of the company as a result of the capital raise just announced. And it comes after Nikola already diluted shareholders in the third quarter through other fundraising moves. Some of the need for more capital comes after a recall of about 200 of its battery-electric trucks cost the company $62 million.
Source Fool.com
