It’s amazing, sometimes, what can happen if you follow the rules. Just ask electric vehicle stock Nikola (NASDAQ:NKLA), whose share price shot up over 12% at one point in Friday afternoon’s trading. And all it had to do was follow the rules on Nasdaq. More specifically, Nikola received written notice from Nasdaq that it was, once again, in full compliance with Nasdaq’s rules and would therefore remain a listed stock on the exchange. For a while, that wasn’t such a clear-cut prospect. Nikola’s share price slipped under the $1 per share level required for listing on Nasdaq and stayed there for some time. As such, Nasdaq was poised to remove the stock from its listings.
The news comes at a great time for Nikola, as it’s about to hold a special shareholders’ meeting to discuss a matter known as Proposal 2. Proposal 2 allows Nikola to issue more stock, which in turn will allow Nikola to raise more money and keep its operations moving. A Motley Fool report underscored how vital this was, declaring that Nikola “will need to access capital markets again to survive.” It will almost certainly need some capital incoming, especially after the unexpected fire at Nikola’s headquarters last week. Just addressing that fire will require some cash on hand.
Nikola’s gains today don’t change analysts’ opinions, however. With one Buy and four Hold ratings, Nikola stock is considered a Hold by analyst consensus. However, thanks to its average price target of $3.25 per share, Nikola stock offers an amazing 131.32% upside potential.
