Nikola Corporation (NASDAQ:NKLA) stock declined by more than 7% in after-hours trading on Thursday after the company announced a public offering of 29.91 million shares of its common stock. The electric heavy-truck maker has priced the offering at $1.12 per share, reflecting a 20% discount from yesterday’s closing price.
The offering is expected to close on April 4. Further, Citigroup (C), the sole underwriter of this offering, will be granted a 30-day option to purchase up to an additional 4.49 million shares.
Simultaneously, Nikola entered into an agreement to sell another 59.37 million shares of common stock to an unknown investor. The direct offering is expected to close on April 11 and is not dependent on the closing of the public offering.
The total gross proceeds from both offerings are expected to be $100 million, which the company intends to use for working capital and other general corporate purposes.
Recent Events
The company overflowed investors with several positive developments in the past week. It announced it has received the 100th sales order for its Tre hydrogen fuel cell electric trucks.
Also, Nikola entered a partnership with Chart Industries to purchase hydrogen production equipment for Class 8 heavy trucks. Nevertheless, the retirement of Nikola’s current CFO increased uncertainty among investors.
Is NKLA Stock a Good Buy?
NKLA has a Moderate Buy consensus rating based on two Buys and three Hold ratings assigned in the past three months. The average Nikola stock price target of $4 implies 185.7% upside potential.
