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.
Zabih Ullah is a seasoned finance writer with more than ten years of experience. He is highly skilled at analyzing market trends, decoding economic data, and providing insightful commentary on various financial topics. Driven by his curiosity, Zabih stays updated with the latest developments in the finance industry, ensuring that his readers receive timely and relevant news and analysis.
