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Nikola, the maker of hydrogen and battery powered trucks once valued at nearly $30bn, said on Thursday that it was considering a financial restructuring.
The company, whose founder was convicted of securities fraud, warned last year that its cash balance had fallen to less than $200mn and that it had only enough liquidity to keep operating for a few more months.
“Nikola continuously assesses its financial position and liquidity needed to operate its business,” a spokeswoman said. “As part of that review, the company is evaluating a variety of options, which includes a financing as part of a financial restructuring.”
A bankruptcy could result in an asset sale, a reorganisation or liquidation. The Arizona-based company has more than $350mn of debt and leases. Revenue for the first three quarters of 2024 was just $64mn as it struggled to commercialise its technology.
The investment bank Houlihan Lokey was advising Nikola on its options, according to one person directly familiar with the matter
Should it formally file for bankruptcy, Nikola would join several automotive disrupters that raised cash, or went public in 2021 to seek court protection from creditors, including Fisker, Arrival and Lordstown Motors. Nikola’s current market capitalisation is just $63mn.
Nikola aimed to pioneer green propulsion for long-haul trucks and went public in 2020 via a blank-cheque company. Founder Trevor Milton hyped the stock on social media and at one point Nikola was worth more than legacy carmaker Ford as investors looked to back what they hoped would be the next Tesla.
But after its market capitalisation reached nearly $30bn, the share price collapsed when short seller Hindenburg Research accused the company of being an “intricate fraud”. It also revealed that a truck in a Nikola promotional video that was apparently moving under its own power was rolling downhill instead.
Federal prosecutors charged Milton with securities and wire fraud for misleading investors about Nikola’s technology. Milton was convicted on three out of four counts in 2022 and sentenced to four years in prison. He remains free on bail while appealing his conviction.
The Wall Street Journal first reported that Nikola was considering a financial restructuring.
