Nikola Corporation saw its shares plunge 27.8% on Thursday following reports that the struggling electric truck manufacturer is considering selling parts or all of its business. The stock closed at $0.85 per share after reaching a new 52-week low of $0.76 earlier in the day.
According to reports, Nikola is evaluating multiple strategic options, including bringing in new partners or raising additional funds. The news follows the company’s previous warning to investors in its third-quarter earnings call, where it stated that it only had enough cash to sustain operations into the first quarter of 2025. As of the end of the third quarter, Nikola had reported $198 million in cash reserves.
CEO Steve Girsky, a key stakeholder in the company, emphasized in the earnings call that Nikola was in active discussions with various potential partners who recognize the value of the company’s technology and infrastructure. Despite these efforts, investors remain concerned about the company’s long-term financial health and ability to secure sufficient funding.
Girsky, a former bank analyst and General Motors executive, played a crucial role in taking Nikola public through a special purpose acquisition company (SPAC) merger in June 2020. At the time, the deal was seen as a major step forward for the EV industry, inspiring several other electric vehicle startups to go public through similar SPAC mergers.
However, Nikola, like many of its SPAC-backed EV peers, has struggled to meet the lofty expectations set during its market debut. The company has faced significant challenges, including federal investigations, executive turnovers, and concerns over the viability of its business model.
Nikola’s troubles reflect broader issues within the EV sector, where several startups have encountered difficulties in scaling production, securing funding, and achieving profitability. While the company continues to seek new opportunities and strategic partnerships, its ability to survive in the increasingly competitive EV market remains uncertain.
As Nikola navigates its financial hurdles, investors and industry observers will closely watch for any updates regarding potential deals or restructuring efforts. Whether through partnerships, asset sales, or new funding, the company will need a viable strategy to regain investor confidence and ensure its long-term sustainability.
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