Nikola Corporation: Bankruptcy Likely To Wipe Out Equity Holders - Strong Sell

2025-02-19 16:37:29 ET

Summary

• As expected, zero-emission truck manufacturer Nikola Corporation has filed for bankruptcy protection and intends to sell its assets in an auction pursuant to Section 363 of the U.S. Bankruptcy Code.
• The court filing states an estimated 1,000 to 5,000 creditors and liabilities in the range of $1.0 billion to $10.0 billion relative to assets of between $0.5 billion and $1.0 billion.
• While financial debt is below $100 million, the company has a myriad of other liabilities, including more than $80 million still outstanding under the 2021 SEC settlement.
• Unfortunately, sales proceeds are not likely to cover the company's liabilities after two high-profile investment banks failed to find a suitor for the ailing company.
• With Nasdaq likely to delist Nikola Corporation's common shares within short notice, I am reiterating my “Strong Sell” rating.

Note:

I have covered Nikola Corporation or “Nikola” ( NKLA ) previously, so investors should view this as an update to my earlier articles on the company. ...

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