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Nikola (NASDAQ:NKLA) Corporation, an electric vehicle manufacturer with a market capitalization of just $32.9 million, is set to be removed from the Nasdaq Stock Market listings following a series of events that have culminated in a formal delisting notice from Nasdaq. The delisting is a direct result of the company’s recent voluntary filing for chapter 11 bankruptcy on Monday, February 19, 2025. According to InvestingPro data, the company has been struggling with a significant debt burden of $352.8 million and has been rapidly burning through cash, with negative free cash flow of $573 million in the last twelve months.
The Nasdaq staff cited several reasons for the delisting decision, including the bankruptcy filing itself, the potential impact on the company’s existing security holders, and doubts about Nikola’s ability to meet Nasdaq’s continued listing requirements. This comes as the stock has lost nearly 98% of its value over the past year, trading at just $0.38 per share. The delisting notice, received by Nikola on the day of the bankruptcy filing, outlines that trading of the company’s common stock will be suspended at the market’s open on Monday, February 26, 2025. Subsequently, a Form 25-NSE will be filed with the Securities and Exchange Commission, which will officially remove Nikola’s securities from listing on Nasdaq.
Nikola has stated that it will not appeal the delisting decision. With the suspension of trading on Nasdaq imminent, the company’s common stock will cease to be traded on the exchange starting from the specified date. This development follows the previous name change of the company from VectoIQ Acquisition Corp. to Nikola Corporation, which occurred on February 13, 2018.
The information regarding Nikola’s delisting and bankruptcy filing is based on the company’s latest 8-K filing with the SEC. As the electric vehicle industry continues to evolve, the market will be watching closely to see how Nikola’s situation unfolds following its delisting and bankruptcy proceedings. For investors seeking deeper insights into similar situations, InvestingPro offers comprehensive financial health scores and detailed analysis of over 1,400 US stocks, helping identify potential risks and opportunities before they materialize.
In other recent news, Nikola Corporation has filed for Chapter 11 bankruptcy protection due to financial struggles, as reported by Investing.com. The company has initiated a court-supervised sale process to maximize stakeholder value, with plans to auction its assets. Nikola’s cash reserves stand at approximately $47 million, which it intends to use to fund operations during the bankruptcy proceedings. Despite efforts to advance zero-emission transportation with its hydrogen fuel cell electric trucks, the company has faced significant market and macroeconomic challenges.
The bankruptcy filing was made in the United States Bankruptcy Court for the District of Delaware, and Nikola seeks to hold an auction and sale process under Section 363 of the U.S. Bankruptcy Code. Interested parties, including strategic and financial buyers, are invited to participate in the auction for Nikola’s assets. In addition, Nikola has announced a new hydrogen refueling station in West Sacramento, California, under its HYLA brand, expected to be operational in January 2025. This station aims to support Nikola’s hydrogen fuel cell electric trucks and strengthen the north-south I-5 freight corridor.
The company has been exploring various strategic alternatives to address its financial difficulties, including potential sales of parts of the business or the entire company. CEO Steve Girsky has acknowledged the company’s efforts in raising capital and reducing liabilities, but the challenges have led to the Chapter 11 filing. As Nikola navigates through these financial challenges, investors and industry watchers will closely monitor the situation for further developments.
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