Phoenix, Arizona-based Nikola Corporation (NKLA) is asking stockholders to submit questions regarding a Proxy Statement the company filed in early April ahead of the annual stockholders meeting on June 5, 2024 when five proposals will come to a vote. Steven Shindler, Chairman of the Nikola Board, is particularly focused on Proposal 2, which advocates for a reverse stock split.
Not passing the proposal means Nikola could face Nasdaq delisting and unspecified limitations on securing capital.
A reverse stock split, essentially, consolidates the number of existing shares of corporate stock into fewer but more valuable shares. Shindler, as part of his efforts to rally stockholders to vote in favor of the upcoming proposal, released a video stating the reasoning behind the proposed split.
“We must eliminate the distraction of delisting and position ourselves to raise capital more efficiently and effectively,” he said.
Shindler is focusing on answering three key stockholder questions:
If Proposal 2 is approved and implemented, Nikola says the reverse stock split will “reduce the number of common shares outstanding and increases the dollar share value per share by the same ratio.” Furthermore, Nikola stock will be able to trade above $1.00. Hopefully, this action eliminates the delisting risk and keeps the door open for future capital.
Company investors are being encouraged to vote in favor of all five proposals, which also include nominees for the Board of Directors (Proposal 1). Stockholders - including those who no longer own shares - are already able to vote on the proposals. Their deadline is June 4. A Q1 earnings call is scheduled for May 7 where additional updates will be announced.
