Nikola Plunges as Nasdaq Warns of Delisting Risk
Shares of Nikola Corporation, a designer and manufacturer of zero-emission vehicles, plunged on Monday after Nasdaq warned that the company’s stock price could be delisted if it falls below $1.
Nasdaq’s Warning
Nasdaq sent a letter to Nikola on May 24th, warning that the company’s stock price had fallen below the minimum $1 per share requirement for continued listing on the exchange. The letter stated that if the stock price does not remain at or above $1 for a minimum of 10 consecutive business days, Nasdaq will notify the company that it is not in compliance with the exchange’s listing rules.
Nikola’s Response
In response to the Nasdaq warning, Nikola issued a statement saying that it is “working diligently to regain compliance with the Nasdaq listing rules.” The company also noted that it is “confident that it will be able to do so in a timely manner.”
Share Price Plunge
Nikola’s share price has been on a downward spiral since the company went public in June 2020. On Monday, the stock fell as much as 16%, to $1.09, before closing at $1.17. The stock has lost more than half its value since its peak in February 2021.
Short Sellers
The Nasdaq warning comes as Nikola has been under pressure from short sellers. Short sellers are investors who bet that a stock’s price will fall. In April 2021, short seller Hindenburg Research published a report accusing Nikola of fraud and exaggerating its technology. The report sent Nikola’s stock price tumbling and prompted an investigation by the U.S. Securities and Exchange Commission.
Investor Confidence
The Nasdaq warning and the ongoing investigation have raised questions about the company’s future and investor confidence in the stock. Analysts have noted that the stock could remain volatile until the investigation is resolved.
Company Overview
Nikola Corporation is a designer and manufacturer of zero-emission vehicles. The company was founded in 2015 and went public in June 2020. Nikola has partnerships with several major automakers, including General Motors and Volkswagen. The company has also announced plans to build a network of hydrogen fueling stations across the United States.
Future Outlook
Despite the Nasdaq warning and the ongoing investigation, Nikola remains optimistic about its future. The company has said that it is continuing to make progress on its plans to build a network of hydrogen fueling stations and that it is confident that it will be able to regain compliance with Nasdaq’s listing rules.
Conclusion
Nikola Corporation’s stock price has been on a downward spiral since the company went public in June 2020. On Monday, the stock fell as much as 16%, after Nasdaq warned that the company’s stock price could be delisted if it falls below $1. The company has responded to the warning, saying that it is “working diligently to regain compliance with the Nasdaq listing rules.” Despite the Nasdaq warning and the ongoing investigation, Nikola remains optimistic about its future and is confident that it will be able to regain compliance with Nasdaq’s listing rules.