FILE PHOTO: A Nikola Hydrogen Fuel Cell EV is displayed during the press day preview of the Los Angeles Auto Show in Los Angeles, California, U.S. November 16, 2023. REUTERS/David Swanson/File Photo
(Reuters) - Nikola on Thursday announced a 1-for-30 reverse stock split to comply with Nasdaq listing rules.
The stock will begin trading on a split-adjusted basis starting June 25, the company said.
WHY IT'S IMPORTANT
Through a reverse stock split, a company can shore up its stock price by drastically reducing the number of shares outstanding, helping it to avoid being delisted from an exchange.
CONTEXT
Nikola missed Wall Street expectations for first-quarter revenue in May as it delivered fewer hydrogen fuel cell trucks. Its cash and cash equivalents at the end of the three-month period ended March 31 stood at $345.6 million, down from $464.7 million in the prior three months.
BY THE NUMBERS
The number of authorized shares will be reduced from 1.6 billion to 1 billion after the split.
The company had 1.36 billion shares outstanding and its market capitalization stood at around $652 million, as of last close.
MARKET REACTION
Nikola's shares fell more than 15% to a record low of 40 cents on Thursday, after tumbling about 45% this year, up to last close.
(Reporting by Akash Sriram in Bengaluru; Editing by Anil D'Silva)
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