Nikola, once worth more than Ford, craters after filing for bankruptcy
The short, scandal-ridden tale of electric and hydrogen-powered vehicle maker Nikola is ending at Chapter 11.
The company was worth about $100 million on the heels of a 40% gain in the opening session of the week. Shares have since gotten hammered in early trading on Wednesday.
In its bankruptcy filings, management estimated that the company had between $500 million and $1 billion in assets versus $1 billion to $10 billion in liabilities.
On June 9, 2020, the market value of upstart EV maker peaked at nearly $29 billion, just a few days after it began trading on the Nasdaq via a SPAC. Over the course of that month, its market capitalization exceeded that of long-established automotive giant Ford. But just like its prototype, “Nikola One,” the stock has been powerless and sliding downhill ever since. In the meantime, its founder, Trevor Milton, was convicted of fraud related to statements he made about that vehicle’s development as well as the company’s supposed battery business.
Shares had been in the doldrums for years ahead of this filing, prompting management to deliver a massive reverse stock split in a bid to keep its share price above $1 and stay listed on the Nasdaq.
Nikola joins Fisker, Canoo, and Lordstown Motors on the list of EV companies that went public via a SPAC and filed for bankruptcy less than five years later.
