Nikola Corporation (NKLA), the company once hailed as a pioneer in hydrogen fuel and battery-powered trucks, experienced a sharp decline in its stock price on Wednesday following a bankruptcy filing in the United States. This comes on the heels of its founder, Trevor Milton, being sentenced to prison for fraud.
Nikola, which was valued at over $30 billion (£24 billion) at its peak, went public in 2020 amid significant hype surrounding its potential to revolutionize the transportation industry. However, its stock value collapsed just months after its initial public offering (IPO) when accusations surfaced that the company had misled investors about its technology. These claims were largely centered around Milton’s exaggerated claims about the capabilities of Nikola’s hydrogen-powered vehicles.
The company’s financial troubles have only deepened since then. On Wednesday, Nikola filed for bankruptcy protection in a Delaware court, revealing that it had amassed over $1 billion in liabilities. At the same time, the company disclosed that it had just $47 million in available cash and would be seeking a sale of its assets.
Despite Milton’s exit and the legal issues surrounding him, Nikola has managed to produce and sell hundreds of hydrogen-powered trucks. However, its financial results have been far from encouraging. For the nine months leading up to September 2024, Nikola reported a staggering $481 million in losses.
The company’s future now hangs in the balance as it seeks to navigate its bankruptcy proceedings and salvage whatever assets it can. Investors and industry observers will be watching closely to see if Nikola can emerge from this crisis or whether it will become another cautionary tale in the world of high-flying start-ups that falter under financial and legal pressure.
