At one point, the hydrogen truck manufacturer Nikola, which attracted attention as "the second Tesla" with a market capitalization higher than Ford, appears to be preparing to file for bankruptcy protection.
On the 6th (local time), The Wall Street Journal (WSJ) reported, citing sources familiar with the matter, that Nikola is undergoing bankruptcy proceedings and considering various options such as sale or restructuring. Nikola went public on the U.S. stock market in June 2020 based on its hydrogen truck technology. On its first day of trading, the stock closed at $33.75, more than three times the initial public offering price of $10, and five days later, it surged to $93.99, surpassing Ford's market capitalization.
However, at the time of its public offering, Nikola had not sold a single truck, and doubts about its technology began to arise. Activist short-selling investment firm Hindenburg Research revealed that the hydrogen electric truck featured in Nikola's promotional video was actually filmed rolling down a slope, leading Nikola to face a crisis. U.S. securities and justice authorities launched investigations, and it was found that the scenes of the hydrogen electric truck rolling down the slope were fabricated to appear as if it were self-propelling.
This incident led to the conviction of founder and chief executive officer (CEO) Trevor Milton. Milton was sentenced to four years in prison in 2022 for providing false information to investors. As a result, Nikola rapidly lost trust, and the company's future became uncertain.
According to WSJ, Nikola produced over 80 hydrogen electric trucks in the third quarter of last year but recorded a net loss of $200 million. In December of last year, Nikola attempted to secure $300 million in debt and equity financing to raise operating funds, but the situation did not improve.
Once attracting investor interest with its soaring stock price, Nikola has now fallen to the level of a penny stock. Due to continuous declines in stock price and worsening management, Nikola executed a reverse stock split, consolidating 30 existing shares into 1 share in 2023. A reverse stock split, relative to a stock split, refers to combining shares with low par values into higher par values. However, even after the reverse stock split, the stock price did not significantly rise, and it currently stands at just $0.75. Over the past year, Nikola's stock has plummeted by 96.5%, resulting in virtually total loss.