Nikola Stock Drops After Firm Discloses Intent To Raise $100M Via At The Market Offering: Retail’s Not Impressed

Shares of Nikola Corp (NKLA) were in the spotlight on Monday morning after the heavy-duty commercial battery-electric vehicle manufacturer disclosed in an SEC filing that it is looking to sell shares having an aggregate offering price of up to $100 million in an at-the-market offering.

The stock opened nearly 6% lower on Monday morning following the disclosure.

The company said it intends to use the net proceeds for working capital and general corporate purposes. A portion of the net proceeds may also be used to acquire or invest in complementary businesses, assets or technologies, although it does not have any present commitments or agreements to do so.

For the share sale, the firm has entered into an equity distribution agreement with BTIG, LLC, as the sales agent.

In a separate filing, Nikola disclosed an offering of over 34.15 million shares of common stock, that consists of up to 33,920,250 shares issuable upon conversion of the outstanding June 2022 notes and up to 239,006 shares issuable upon conversion of the outstanding June 2023 notes.

Meanwhile, Nikola also completed a convertible notes offering of $175 million aggregate principal amount of 8.25% geen convertible senior notes due 2026, according to Baird.

Following the disclosures, retail sentiment on Stocktwits inched lower into the ‘bearish’ territory (39/100) from ‘neutral’ a day ago. 

NKLA’s Sentiment Meter and Message Volume as of 9:12 a.m. ET on Dec. 9, 2024 | Source: Stocktwits

Most Stocktwits users are expressing disappointment over the potential dilution in the stock.

Recently, DA Davidson reportedly lowered its price target on the stock to $4 from $12 while keeping a ‘Neutral’ rating after the firm’s wider-than-expected third-quarter (Q3) loss.

The analyst noted that the company continues to grow its deliveries, but its cash balance continues to dwindle, with the management highlighting that it only has 5-6 months left.

Notably, Nikola's shares have lost over 93% of their value since the beginning of the year. The stock is trading at record low levels.

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