The shares of electric truck manufacturer Nikola took a nosedive of more than 10% following a series of unsettling events. First, the company announced that its CEO, Michael Lohscheller, would be stepping down immediately due to a “family health matter.” This news undoubtedly raised concerns among investors who may question the stability and future direction of the company. Former General Motors vice chairman Steve Girsky, who currently serves as Nikola’s board chair, will be taking over as the new CEO. Lohscheller will remain in an advisory role until the end of September to aid in a smooth transition.
Furthermore, Nikola’s second-quarter earnings report was also cause for alarm. Although it managed to beat Refinitiv consensus estimates in terms of loss per share and revenue, the numbers still reflect a significant loss for the company. Nikola reported a net loss of $217.8 million for the quarter, or 31 cents per share. It’s worth noting that this includes $77.8 million related to discontinued operations. In comparison, the company lost $173 million, or 41 cents per share, in the same quarter last year. The revenue also dipped to $15.4 million from $18.1 million in the second quarter of 2022.
In an effort to raise additional funds, Nikola received shareholder approval to issue new stock, potentially doubling its current number of shares. This move could provide a much-needed financial boost, but it also dilutes the ownership stake of existing shareholders. It remains to be seen how potential investors and the market as a whole will perceive this decision by Nikola.
Despite the challenging financial situation, Nikola managed to raise $233.2 million in cash during the second quarter through stock sales and the sale of physical assets. The company has also taken steps to reduce its cash consumption going forward. As of June 30, Nikola had $226.7 million in cash on hand, a significant increase from the $121.1 million it had at the end of March.
During the second quarter, Nikola delivered 45 of its battery-electric semitrucks to dealers. Impressively, dealers were able to sell 66 battery-electric trucks to end customers, representing the company’s best quarterly retail result to date. These figures demonstrate the demand and market potential for Nikola’s trucks.
In May, Nikola announced a temporary suspension of production to reconfigure its assembly line to accommodate the production of both battery-electric and fuel-cell trucks. Fortunately, the company has now started producing its latest model, a longer-range fuel-cell powered version of its Tre semitruck. Deliveries of this model are slated to begin in September. Nikola already has orders for a total of 202 fuel-cell trucks from 18 fleet customers, further indicating a promising future for the company.
Nikola’s recent developments, including the departure of its CEO and a challenging second-quarter financial report, have understandably shaken the market. Shareholders and investors are likely to closely monitor the company’s transition to new leadership and its ability to improve its financial performance. However, positive indicators such as strong retail sales and the commencement of production for its latest model provide hope for a potential turnaround. Only time will reveal whether Nikola can adapt and thrive in the highly competitive electric truck industry.
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