Nikola Corporation (Nikola), a maker of battery-powered trucks and hydrogen-electric trucks, has been running out of money. The start-up’s stock is hovering around an all-time low. At its peak, Nikola was worth more than US$30 billion. Today, it is worth around US$665 million. With little options left to raise capital, Nikola has decided to further dilute its stock even though the price is depressed.
On March 30, the company announced the pricing of an SEC-registered underwritten public offering and concurrent registered direct offering at a price of US$1.12 per share. Nikola will sell 29,910,715 shares of common stock to the public in the public offering and 59,374,999 shares of common stock to an investor in the concurrent registered direct offering pursuant to a forward stock purchase agreement. The gross proceeds to Nikola from the public offering and the concurrent registered direct offering, before deducting underwriting discounts and commissions and other offering expenses, are US$100 million. In addition, Nikola has granted the underwriter a 30-day option to purchase up to an additional 4,486,607 shares of its common stock at the public offering price, less underwriting discounts and commissions. The public offering is not conditioned on the closing of the concurrent registered direct offering, and the concurrent registered direct offering is not conditioned on the closing of the public offering. The public offering is expected to close on or about April 4, 2023, subject to customary closing conditions. The concurrent registered direct offering is expected to close on or about April 11, 2023, subject to customary closing conditions.
Nikola currently intends to use the net proceeds from the public offering and the concurrent registered direct offering for working capital and other general corporate purposes. Citigroup is acting as the sole book-running manager for the proposed public offering.