Electric vehicle stock Nikola (NASDAQ:NKLA) got some of the worst news a Nasdaq-listed stock can get – a delisting notice. With Nikola’s future as a publicly-traded stock on the line, can it turn things around? Based on the double-digit losses Nikola incurred in Thursday afternoon’s trading, the answer isn’t looking good.
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The problem wasn’t in any filing that Nikola failed to turn in or anything like that. It was a matter of overall popularity and appeal to investors that mattered here, which not only drove Nikola’s share price under $1 per share but to keep it there long enough for Nasdaq to issue a notice. Now, Nikola has 180 days—until November 20, 2023—to get its share price back over $1 or face removal from the Nasdaq listings.
Nikola hasn’t made a lot of friends among shareholders of late. It’s been frantically selling equity to try and raise cash to address soaring costs for batteries and other materials. Just yesterday, it turned to shareholders to vote in the affirmative to increase the total number of shares available so it could sell them and raise further cash. It’s already announced plans to “streamline” assembly at its plant in Coolidge, Arizona, in a bid to cut back on its cash burn. But it needs something a lot more definitive if it expects to get its share price up.
Analysts are taking a wait-and-see approach, and they’re doing it with unanimity. Six Hold ratings on Nikola stock make it absolutely a Hold. However, those who take a chance on Nikola stock right now stand to make a substantial return; Nikola stock offers 295.78% upside potential to investors thanks to its average price target of $2.40.
