On May 26th, Shares of Nikola Corporation (NASDAQ: NKLA) experienced a significant drop of -4.18% in response to a compliance concern raised by Nasdaq Inc. The company was notified that it does not meet the minimum bid requirements to remain listed on the exchange.
According to the rules of the exchange, companies must maintain a minimum closing price of $1 per share for 30 consecutive business days. However, Nikola’s shares have not traded above $1 since April 11, putting them at risk of being delisted.
This latest hurdle adds to the challenges faced by the zero-emission vehicle startup, which has recently witnessed the departure of high-level executives and has exited the European market to concentrate on its operations in the United States. In addition, the company’s first-quarter earnings results, released earlier this month, were slightly worse than analysts’ estimates.
JPMorgan analyst Bill Peterson expressed skepticism about Nikola’s business and profitability prospects compared to the company’s targets, despite understanding its strategy and a new focus. Peterson emphasized the limited options available for Nikola to raise capital in the current market environment.
Nikola responded to Nasdaq’s notification, stating that it does not currently impact its listing on the exchange. The company has been granted a grace period of 180 calendar days, until November 20, to regain compliance with the listing rule. Within this timeframe, Nikola’s stock must close at a minimum of $1 for at least 10 consecutive business days.
NASDAQ: NKLA Nikola Corporation
