Nikola Corp (NASDAQ:NKLA) shares tanked after the electric truck maker disclosed that it has received from the Nasdaq exchange a notice of noncompliance with the minimum-bid listing requirement.
The tech-dominated Nasdaq requires stocks to maintain a minimum bid price of $1 to remain listed, while Nikola's stock has closed below $1 for the past 31 sessions starting April 11.
Investors reacted to the news, sending Nikola shares down 18.4% to $0.63 in morning trade.
Nikola stated that the company does not currently meet the minimum closing bid price requirement.
According to Market Watch, the Nasdaq notification letter received by the EV maker states that Nikola has until November 20 to regain compliance, which will require the stock to close at or above $1 for 10 consecutive sessions.
Nikola has been trying to raise cash for operations by selling equity, like other electric vehicle firms, in a challenging market. Reuters reported that on Wednesday it pressed shareholders to vote in favor of increasing the number of shares at its annual shareholder meeting next month.
With just $323 million in cash at the end of 2022 and the ongoing expenses related to launching a fuel cell electric truck and mobile hydrogen fueling trailers, Nikola is continuing to burn through its limited resources, according to analysts.
The Phoenix, Arizona-based company designs and manufactures battery-electric and hydrogen-electric trucks, electric vehicle drivetrains, car parts, energy storage systems, and hydrogen station infrastructure.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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