Nikola sinks on plan to offer new shares, convertible notes

Nikola Corp. shares plunged after the electric vehicle manufacturer announced plans to issue $100 million in new shares and $200 million in so-called green convertible senior notes due in 2026.

The Phoenix-based company said in a securities filing late Wednesday it will use the funds for working capital, general corporate purposes and unspecified projects “in alignment with the guidelines of the Green Bond Principle.” The underwriters will be offered an additional $15 million in stock and $30 million in notes, it said. 

Shares of Nikola fell 19% to $0.80 as of 5:14 p.m. in New York, paring an earlier drop of as much as 29%. It had fallen 55% so far this year as of the close on Wednesday.

The company has struggled after a series of setbacks including managerial turmoil — most recently with the resignation last month of its chief financial officer — as well as troubles with its all-electric trucks and job cuts. Nikola reported cash and cash equivalents of $392 million at the end of last quarter.