Nikola's stock falls as EV maker looks to raise money via convertible-debt deal

By Emily Bary

The company saw unrestricted cash fall in the second quarter

Nikola Corp. plans to raise money through a convertible-debt offering as it looks to scale its electric-vehicle business.

The electric-truck manufacturer announced Monday that it has struck an agreement with various investors that will allow for the sale of up to $160 million in convertible notes. That will start with an initial closing of the sale of $80 million convertible notes, which is expected to haul in $74.3 million in proceeds after expenses.

Shares of Nikola (NKLA) are off more than 7% in Monday morning trading.

The company, like others in its industry, faces the steep capital costs of ramping up an EV business. Nikola posted a net loss of $133.7 million in its latest quarter, while revenue amounted to $31.3 million.

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Nikola also reported that it wholesaled 72 hydrogen-fuel-cell vehicles in the second quarter, and the company has been selling regulatory credits to generate further revenue.

Unrestricted cash for Nikola declined $89 million in the second quarter, and the company ended that period with about $256 million in unrestricted cash.

"Larger disbursements to suppliers as we scale volume and an additional payroll period were partially offset by higher receipts due to higher volume and [at-the-market] proceeds of $52.2 million," Chief Financial Officer Tom Okray said on the second-quarter earnings call.

Separately, Nikola on Monday announced that it won a Sourcewell contract, which it said "allows public agencies to more easily purchase Arizona-assembled Class 8 zero-emission trucks."

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-Emily Bary

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08-19-24 0952ET

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