Nikola (NKLA) in the Spotlight as ValueAct Discloses a 5.6% Stake Soon After the Electric Truck Company Filed a Prospectus for the Issuance of New Shares

Nikola (NASDAQ:NKLA), an emerging contender in the EV sphere, has been making waves in the halls of finance since debuting on the NASDAQ nigh two weeks agone. The stock's growing popularity, especially with investors who use the Robinhood trading app, helped propel information technology to a new zenith last calendar week. Now, it seems even institutional investors are susceptible to Nikola's charms.

In the concluding few hours, ValueAct Capital – a San Francisco-based investment company that manages over $16 billion on behalf of other institutional investors – has disclosed a 5.half-dozen percent pale in Nikola Corporation, equating to 20.36 million shares on the footing of 360.9 million shares that the visitor recorded every bit outstanding as of the 3rd of June.

Of course, the disclosure of ValueAct'due south stake in Nikola came at the heels of another momentous announcement. In a prospectus filed during the after-hours trading session on Monday, Nikola disclosed that it may issue 23.89 million additional mutual shares upon the exercise of pertinent warrants. Moreover, as per the filing, 53.39 one thousand thousand common shares along with 890,000 private warrants may be sold by "selling security holders" at appropriate intervals. Comport in mind that warrants give their holders the right but non the obligation to purchase a security at a detail toll. These private warrants were issued in a individual placement associated with the IPO of VectoIQ – a Special Purpose Acquisition Company (SPAC) that now owns the majority stake in Nikola Motors.

The merger between VectoIQ and Nikola Motors achieved closure on the third of June, prompting a debut of Nikola's shares on the NASDAQ under a new ticker symbol. As a consequence of this deal, Nikola Motors has at present become a wholly-owned subsidiary of VectoIQ, with the combined entity adopting the proper noun Nikola Corporation.

With the filing of the prospectus, Nikola's share price initially plunged by as much as 12 percent in the afterward-hours trading session. Nevertheless, the stock shortly recovered, ending the extended trading session at the $68 level, but two pct below the price level at which Nikola shares were trading before the filing of the prospectus. Every bit far as the master trading session is concerned, Nikola shares generated a good for you proceeds of six.95 percent. Year to date, the stock is now upwardly by 563.28 pct.

Every bit we reported over the weekend, the short involvement in Nikola – the metric measures the proportion of shares that take been sold short by investors – surged to an best high of 7.48 million shares or ii.42 percent of the total bladder as the company'due south share price recorded a new zenith terminal week. To wit, on the 8th of May, the stock surged by a whopping 103.seven per centum, substantially doubling within a span of a unmarried trading session. This fierce rally was prompted by the announcement of an imminent opening of reservations for the visitor'southward much-anticipated Badger electrical pickup truck.

Given that the curt interest in Nikola surged with its stock cost, it tin can exist reasonably surmised that a pregnant proportion of the investor community remains skeptical regarding the financial viability of the electric truck company. Nikola skeptics point out a host of factors that necessitate business organisation. For case, these people highlight the fact that Nikola is not expected to generate even $1 in sales until tardily 2021. Fifty-fifty and so, information technology is equally yet uncertain whether the requisite infrastructure will be in identify for the formal first of operations. Moreover, Nikola has declared around fourteen,000 pre-orders for its course 8 electric trucks, translating to potential acquirement of up to $x billion. However, these pre-orders do not require any deposit or a firm cash commitment. Moreover, many skeptics view Nikola's hydrogen fuel-cell ambitions as being allegorical of a glorified pipe dream. Consequently, the disclosure of meaning institutional interest in Nikola at this juncture, as is evident from the filing related to ValueAct'due south stake, will assistance in bolstering the confidence of investors that remain clashing vis-à-vis Nikola'due south prospects.

Source: https://wccftech.com/nikola-nkla-in-the-spotlight-as-valueact-discloses-a-5-6-stake-soon-after-the-electric-truck-company-filed-a-prospectus-for-the-issuance-of-new-shares/

Posted by: martintrathem2001.blogspot.com