Economy

Nikola shares plummet to record low on $100M stock-sale plan

Shares of Nikola Corporation, a manufacturer of electric vehicles, plummeted to a record low on Tuesday following news that the company is planning a $100 million stock sale.

The Phoenix-based company's stock dropped as much as 19% in trading, according to CNBC. This marks the company's lowest share price since it went public in June 2020.

The company announced on Monday that it is offering up to 40 million shares of its common stock, at a price of $25 per share. The offering is expected to close on April 6, 2021.

Nikola said in a statement that it plans to use the proceeds from the offering for general corporate purposes, including “the development and production of its electric vehicles and hydrogen fuel cell vehicles, the construction of its Badger pickup truck and hydrogen fueling station network, and the expansion of its global presence and operations.”

The company has also indicated that it may use the proceeds for strategic acquisitions and investments, as well as to repay debt.

This news comes just days after the company's founder, Trevor Milton, resigned as executive chairman amid allegations of fraud and misstatements.

The electric vehicle maker has been under pressure from short sellers over the past year, who have raised doubts about the company's ambitious plans and its ability to deliver on them.

The company's stock has been volatile in recent months, but this latest news appears to have spooked investors. Analysts say the stock sale is a sign that the company is struggling to raise cash to meet its goals.

The news has also raised questions about Nikola's long-term prospects and its ability to deliver on its promises. Investors will likely be keeping a close eye on the company's next moves.