Nikola Corporation (NKLA, Financials) shares fell 38.8% to $0.47 on Wednesday at 12:07 PM GMT-5 after the company filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware.
Under Section 363 of the U.S. Bankruptcy Code, the corporation intends to auction and liquidate its assets.
Pending court clearance, Nikola, which aimed to create zero-emission trucks, would keep restricted activities including repairing current cars and preserving select HYLA fuelling operations. These events are supposed to go until the end of March, after which other activities depending on outside partners will follow.
With about $47 million in cash, Nikola files for bankruptcy hoping to support continuous operations, pay for debt, and enable an asset sale. The business said that its decision to expedite the asset selling process was motivated by cash problems and the hefty bankruptcy expenses.
The management of Nikola blamed macroeconomic difficulties and state of the market for their financial difficulties. The corporation could not keep running even with efforts to generate money, lower debt, and save cash.
Trevor Milton started Nikola in Salt Lake City in 2014; it became public on June 4, 2020, after a merger with special purpose acquisition company VectoIQ Acquisition Corp. Not too long after, the business was under regulatory scrutiny, fraud claims surfaced, and Milton resigned as executive chairman.
This article first appeared on GuruFocus.免責聲明：投資有風險，本文並非投資建議，以上內容不應被視為任何金融產品的購買或出售要約、建議或邀請，作者或其他用戶的任何相關討論、評論或帖子也不應被視為此類內容。本文僅供一般參考，不考慮您的個人投資目標、財務狀況或需求。TTM對信息的準確性和完整性不承擔任何責任或保證，投資者應自行研究並在投資前尋求專業建議。