It was Wednesday when Nikola, the very difficult starting of the electric truck, documents filed with the Securities and Exchange Commission stating that they were selling up to $100 million of stock to Antara Capital, a fund that has already invested in Nikola, at a valuation of $1.12 per share. The stock closed Wednesday at $1.50 per share on the market, or more than $1.12 per share, meaning that Nikola sells part of its business to investors at a discount. The deal, Nikola said, was part of a plan to offer $100 million in a new public offering at the same price, $1.12 per share, with Antara picking up the rest if the full $100 million doesn’t. not sold to the public. The stock was hovering at $1.24 per share on Tuesday afternoon. Nikola, the message seemed to be, needs some fresh money, and probably fast.
What exactly is going on at Tesla right now?
Or at least here’s how a press release last Thursday describes how the money would be spent:
Nikola currently intends to use the net proceeds of the public offering and the concurrent registered direct offering for working capital and other general corporate purposes.
Reutersin the meantime, reported Friday that Nikola had approximately $123 million in cash as of last Tuesday and an additional $85 million in restricted cash. Today, Automotive News said that the $100 million stock sale went as follows:
Nikola, one of the first electric vehicle companies to go public through a special purpose acquisition company, or reverse merger SPAC, sold 30 million shares. The remaining 60 million shares went to Antara Capital LP, which owns the company’s convertible bonds.
Once dubbed the “Tesla of trucking,” some industry observers viewed the capital increase unfavorably.
“It’s not a good sign if you have to sell stocks at a discount; the current environment is hurting them,” Michael Ramsey, transportation and mobility analyst at Gartner Inc., told Automotive News.
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Nikola, you will remember, once really considered himself the Tesla of trucking, both named for Nikola Tesla and all, even though it was before Tesla shot the moon and Nikola shot almost to the earth. Today, the fortunes of the two companies could hardly have diverged more, with Tesla worth around $600 billion and Nikola worth just over 0.1% of that, according to the market.
Nor does Tesla spend his time crawling for a few million here and there to stay afloat, while Nikola has about given up on predicting what will happen to him. I will say that Nikola managed to endure longer than perhaps anyone expected, but, at this point, that still doesn’t say much.