NKLA: Nikola Stock Crashes 41% on Rumors Electric Truck Maker Is Nearing Bankruptcy

Infamous ET startup (is that a thing?), which rolled a truck down a hill and called it “fully functional,” may be going belly up.

🔴 Nikola Stock Nosedives

• Nikola stock NKLA plummeted 41% on Friday after a report from the Wall Street Journal said the company was nearing a bankruptcy filing due to… well, many factors, including crushing debt and barely making any sales to keep the business running.
• The hydrogen and electric truck (ET?) startup signed off on the third quarter with about $270 million in long-term debt and $200 million in unrestricted cash.

🗻 ”Roll It Down, They Won’t Know”

• According to the WSJ, Nikola (does the 19th century engineer have a middle name that startups can trademark?) has turned to its lawyers to explore a potential sale, restructuring or pulling in external financing that would save the company from going under.
• It's a controversial bet — Nikola’s founder Trevor Milton floated shares in 2020, two years after he and his crew filmed a truck speeding down a two-lane desert highway. Turns out, it was all smoke and mirrors as the truck was rolled down and not “fully functional” as originally portrayed.

⚠️ It Gets Worse

• Milton was convicted of securities fraud in 2022 for misleading shareholders about the startup’s zero-emissions technology. Crushing debt is perhaps the biggest worry for Nikola right now — the company launched debt and equity offerings seeking $300 million in December.
• Share-price talk: Nikola’s stock is just about gone with the wind. Shares are down 99.9% from their record high in 2020 and closed Friday’s session at 44 cents.