Nikola Corporation (NASDAQ: NKLA) designs and manufactures commercial battery-electric trucks, fuel-cell vehicles, and energy solutions. It also produces vehicle components and energy storage solutions. The company is also building hydrogen fuel station infrastructure throughout the US. It has a vision of a zero-emissions commercial transportation sector.
Nikola Corporation Stock Performance
Nikola Corp. (NKLA) stock plunged 23.39% at the close of trading on December 7, 2023. The stock has dropped below $1 at $0.75 per share. Shares began losing ground after Nikola Corp announced a new fundraising round.
The company said it expects to raise $100 million by selling common stock and $200 million via the sale of convertible bonds. Its latest announcement caused investors to lose confidence in the company’s future, triggering a stock selloff.
The move by Nikola Corp. means that existing shareholders will hold a small stake in the company. It comes following the company’s announcement that it would dilute shareholder’s stake in Q3 via various fundraising channels. Its latest cash crunch was caused by a recall of around 200 battery-electric trucks, which cost $62 million.
Pivot to Hydrogen
In its announcement, Nikola said it would use the funds for working capital and general purposes. Those general purposes will likely include a ramp-up in production for its hydrogen fuel-cell trucks. While the company is still working on battery-electric trucks, its focus is now on fuel-cell vehicles.
In its Q3 2023 earnings report, the company stated that it had 277 non-binding orders from 35 customers for its hydrogen-fuel trucks. The trucks and the hydrogen-fuel cell infrastructure are the last lifelines for survival.
These realizations have prompted investor confidence to wane. The current and challenging macroeconomic conditions make the future look bleak for NKLA stock.
NKLA Stock Forecast
Nikola Corporation has suffered from a series of setbacks in 2023. One of its most recent was the resignation of its CFO in September. Additionally, the company has cut jobs and incurred a huge cost after recalling its battery-electric trucks.
Analysts give NKLA stock a hold rating. They give the stock a high price prediction of $3 and a low of $1. Their average target for NKLA stock is $2.50. Based on its current price of $0.75 per share, that is a 232.18% upside.
Should You Buy NKLA Stock?
Nikola Corporation has faced numerous issues throughout 2023. Year-to-date, the stock has lost 66.10% of its value. It is also strapped for cash. However, if its hydrogen fuel cell trucks pick up, it could help to turn the company’s fortunes around. For now, the hold rating by analysts is an accurate reflection of the state of the firm.
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