Troubled electric truck company Nikola (NASDAQ:NKLA) scheduled a conference call for Friday morning at 10:30 Eastern to discuss a series of events that threaten its survival. NKLA stock is down over 10% this morning.
Chief among them is the sudden resignation of chief executive Michael Lohscheller, effective immediately. Company chairman Stephen Girsky will replace him.
The company also announced a big second-quarter loss, $218 million, 27 cents per share, on revenue of $15 million. The company produced 33 trucks and shipped 45 during the quarter. Revenue was down 15% from a year ago.
Yesterday, NKLA stock rose on the results to $3.40 per share. But the price fell rapidly in pre-market trade this morning once Lohscheller’s resignation was announced. By 8:30, it had fallen below $3 but then began recovering to open at about $3.10.
Survival Mode
Nikola now markets a hydrogen fuel cell semi-truck called the HYLA that claims a range of 500 miles on a fill-up, which can be done in 20 minutes. It says it has 202 firm orders for the vehicle from 18 different customers. Nikola originally tried to sell a truck powered by batteries, but it lacked range.
Nikola started Aug. 3 by celebrating a shareholder vote to increase the company’s outstanding share count. The move may help alleviate a cash crunch and let it build out its orders. Nikola ended June with about $226 million in cash.
The stock sale is aimed at keeping the electric semi-truck maker, founded in 2014 by Trevor Milton, alive. Milton resigned in 2020 and was convicted of securities fraud involving Nikola in 2022. Milton opposed the share increase.
It was the Lohscheller resignation, however, that set off the bears. The company’s press release on the decision said he needed more time with his family. Investors seemed to shrug off the loss and approved the dilution of a share count increase.
NKLA Stock: What Happens Next?
If management can explain Lohscheller’s resignation to the satisfaction of shareholders, it might get the cash to fill its orders. But the company’s fate remains up in the air.
As of this writing, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
