Nikola shares dive 14%, electric truck maker names 4th CEO in 4 years

Aug 4 (Reuters) – Nikola (NKLA.O) on Friday named its fourth CEO in as many years a day after investors okayed a plan to issue more stock to bolster much-needed cash at the electric truck maker, and shares fell 14% as the company reiterated “significant doubts” about continuing as a going concern.

The company said Chairman Stephen Girsky, a former General Motors (GM.N) executive, will immediately take over from Michael Lohscheller, who is stepping down due to a family health matter.

Nikola’s investors on Thursday approved a proposal that will allow the company to issue more shares. It needs $600 million to execute its business plan but it will not be entirely dilutive equity capital, Girsky said on a call with reporters.

Before Friday’s decline, Nikola’s share price had soared nearly 60% this year.

Nikola flagged “substantial doubts” about its ability to continue as a going concern for the next 12 months, reiterating its warning in May, as it awaits “critical” additional capital.

The maker of Tre model electric trucks has been trying to pivot to hydrogen fuel cell technology. Shares were also dragged by a downbeat current-quarter revenue forecast.

Nikola forecast third-quarter revenue of $18 million to $28 million, compared with estimates of $34.5 million, according to Visible Alpha. The company said it expects 300 to 400 deliveries this year, up from between 250 and 350 it projected earlier.

Other electric vehicle (EV) startups also have toiled to ramp up production, meet delivery targets and raise funds as cash reserves dwindled.

Supply chain delays forced EV maker Fisker to slash its annual production target on Friday.

Nikola also flagged supply bottlenecks. It had cash and cash equivalents of $226.7 million at the end of the second quarter, compared with $441.8 million, a year earlier.

This summer, Nikola adjourned and rescheduled its shareholder meeting twice to build support for the share issuance among investors worried it would dilute their stakes. The move was also opposed by founder Trevor Milton, who stepped down in 2020 after fraud allegations and was later convicted.

The company laid off 270 employees in June and liquidated assets of a recently acquired battery maker last month.

Separately, Nikola reported a narrower second-quarter loss as lower production of its Tre battery-electric trucks in the April-June period helped keep costs in check.

Reporting by Akash Sriram in Bengaluru and Abhirup Roy in San Francisco; Editing by Anil D’Silva, Sriraj Kalluvila and David Gregorio

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