Nikola Stock Is Tanking Thursday: What's Going On?
Portfolio Pulse from Adam Eckert
Nikola Corp (NYSE:NKLA) shares are plummeting after the company announced plans to offer $100 million of common stock and $200 million of green convertible senior notes due 2026. The offerings include options for underwriters to purchase additional shares and notes. Proceeds from the stock offering will be used for working capital and general corporate purposes, while proceeds from the notes will fund eligible projects. Despite tripling its unrestricted cash since Q1, Nikola's stock has dropped over 54% in 2023 and was down 20.6% to 78 cents.
December 07, 2023 | 2:15 pm
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Nikola Corp's stock is declining due to the announcement of a significant offering of common stock and convertible notes, which typically dilutes existing shareholders' equity.
The sharp decline in NKLA's stock price is a direct result of the announced offerings, which are likely to dilute current shareholders' stakes and increase the company's debt. This is often perceived negatively by the market, leading to a decrease in stock price. The impact is significant given the size of the offering relative to the company's market capitalization and recent stock performance.
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