Going downhill —
Nikola’s stock price has nose-dived for four straight trading days.
Timothy B. Lee
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Enlarge / Nikola Chairman Trevor Milton unveils the Nikola One truck in December 2016.
In June, aspiring hydrogen truckmaker Nikola became a publicly traded company thanks to a merger with a special-purpose acquisition company. That transaction included a 180-day lockup for company insiders, designed to prevent them from dumping their shares on unsuspecting investors in the first few days of trading.
Today is the first day those insiders can sell their shares, and Nikola’s stock price is down 15 percent. That’s on top of yesterday’s 26 percent decline after Nikola announced it was canceling its Badger pickup truck.
Nikola’s stock is now down about 80 percent from its post-IPO high in June and down 65 percent since September’s announcement of the deal with GM. The failure to close that deal, announced yesterday, forced Nikola to abandon the Badger.
According to CNBC, the majority of the shares unlocked on Tuesday belong to founder and former executive chairman Trevor Milton, who owned more than 90 million Nikola shares. Milton was forced to resign from Nikola in September after revelations that he had lied about the functionality of the company’s first product, the Nikola One. In reality, the truck never worked; a promotional video featuring the truck “in motion” actually showed it rolling down a hill.
A spokesman for Milton declined to tell CNBC whether he had sold any of his shares. But what is clear is that trading in Nikola was unusually heavy on Tuesday morning. As I write this around 3pm EST on Tuesday, more than 60 million shares have changed hands. That compares with an average of around 20 million shares traded on a typical day in November—though it’s less than the 93 million shares that changed hands on Monday.