Electric Truckmaker Nikola Prods Investors To Back 200 Million-Share Increase

(Updates to clarify that the proposal is for a share count increase.)

Nikola, a maker of battery- and hydrogen-powered trucks, is pleading with investors to approve a plan to increase its authorized share count less than a week ahead of its annual meeting. Its controversial founder opposes the move.

The Phoenix-based company, which started delivering electric semis this quarter built at its Coolidge, Arizona, plant, hopes to raise much-needed funds by boosting its shares outstanding by a third to 800 million from 600 million currently. A decision on the proposal is to come at the company’s annual meeting, scheduled for June 30.

“Approving this proposal would allow Nikola to increase the number of authorized shares of common stock and would provide us with increased flexibility to support among other things, the growth of our business,” Chairman Steve Girsky said in a webcast on Friday. “I want to be crystal clear. There are only a few days left for you to vote and we need everyone to vote now.”

Nikola has had a turbulent run since going public via a SPAC merger in June 2020. Founder Trevor Milton, who remains a major shareholder, was forced out of the company after being accused of lying to investors and is to go on trial in federal court in July for multiple counts of fraud. He has denied any wrongdoing. Nikola settled with the Securities and Exchange Commission over the matter last year, agreeing to pay a $125 million fine to put the matter behind it, and streamlined operations under CEO Mark Russell. It’s also announced a string of new partnerships with energy and industrial companies and begun delivering vehicles, but funds are getting tight.

The company’s shares have taken a beating over the past two years, plunging from a high of $75.06 per share on June 23, 2020, to $5.61 in Nasdaq trading on Friday.

Milton voted against the share count increase on June 1, at Nikola’s initial annual meeting, leading the company to adjourn the proceedings until next week.

Nikola reported having about $360 million of cash and equivalents in its first-quarter results filing, though the company needs considerably more money to complete the construction of its Coolidge plant, begin building hydrogen fuel cell trucks and set up large-scale hydrogen fuel stations needed to power them.

“I want to be super clear about this: We need your vote for proposal two, which allows us to increase the number of shares for our company’s common stock,” Girsky said. “If you don’t vote, that’s effectively a vote against this important proposal.”