Electric Truck and Hydrogen Fuel Startup Nikola Facing off With FounderJuly 5, 2023
Trevor Milton is urging other company shareholders not to proceed with a plan to issue more shares.
Nikola, the US electric truck and hydrogen fuel startup, is ready for a faceoff with its founder, Trevor Milton, who in 2022 was convicted with securities fraud.
The convicted founder is currently the largest shareholder, holding about 7 percent of the company.
In May 2023, Milton posted on Instagram that he had voted against Nikola’s proposal to double the number of shares it is permitted to issue. He has been urging other shareholders to vote the same way he did. Today is the deadline for shareholders to vote for or against the electric truck and hydrogen fuel company’s new stock.
“The company does not need new shares, they need new leadership,” said Milton in the Instagram post he made on June 15.
The disagreement arose when Nikola failed to gain the shareholder support it required for the stock issuance at its June annual meeting. The truck maker has stated that if a majority of shareholders don’t vote for the new shares, it may suffer in its liquidity position.
Despite promising hydrogen fuel projects, the Nikola stock price has been suffering.
At the close of June, the Nikola share price closed at $1.38, which was a substantial drop when compared to the same date in 2022, when it was $4.72. In 2020, there was a point at which Nikola’s valuation was higher than that of Forde, though it did tank with the accusation of being “an intricate fraud” by short seller Hindenburg Research in a report it published.
In 2022, Nikola was forced to extend voting when its annual meeting was unsuccessful in building the investor support required to issue more shares. Now, “[shareholders] might be upset they have had to face several rounds of dilution and put their collective foot down,” said DA Davidson managing director Michael Shlisky.
At the writing of this article, the hydrogen fuel and electric truck company declined to comment, but had said in June that by encouraging shareholders to vote against the intentions of Nikola, Milton was in violation of his separation agreement.
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