Nikola Corporation (NASDAQ: NKLA) stock plummeted on Tuesday after M&M Residual nominated five director candidates for election to the company’s nine-member Board of Directors.
The nominees, namely Cole Cannon, Derek Johnson, Hans Peterson, Paul Southam, and Dave Sparks, put forward by M&M Residual, aim to challenge the current board’s decisions and steer Nikola in a new direction.
This move comes after Nikola rejected a slate of dissident nominees proposed by an entity controlled by former Executive Chairman Trevor Milton earlier this month. However, M&M Residual has made it clear that despite the board’s public rejection, their nominations remain legally valid, setting the stage for a contentious battle for control.
M&M Residual said in a statement,
“While the Board recently publicly stated that it rejected our nominations, the reality is that the Company has not legally done so and that our nominations still stand.”
M&M Residual, which owns around 4.5% of Nikola’s outstanding stock, criticized the current leadership under CEO Steve Girsky, citing a significant decline in stock value from over $30 per share to less than seventy cents per share.
According to M&M Residual, under Girsky’s leadership, shareholders have suffered substantial losses, with a 72% decline in stock value. The group accused the current board of overseeing operational underperformance, value-destructive acquisitions, and the breakdown of crucial partnerships, all while accumulating debt.
Moreover, M&M Residual highlighted widespread support from other shareholders for a leadership overhaul, especially in light of Nikola’s recent disclosure regarding doubts about its ability to remain operational in the coming year.
M&M Residual contends their nominees have the requisite expertise in operations, supply chain management, and electric vehicles to spearhead a vital turnaround.
Nikola (NASDAQ: NKLA) Stock Reaction
NKLA stock plunged 4.65% to close at $0.71 on Tuesday. The traders had exchanged hands with 173,896,731 (173.89 million) shares compared to the average daily trading volume of 99.77 million.
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