Asset Classes

Free investment financial education

Language

Multilingual content from IBKR

Close Navigation
Learn more about IBKR accounts

Nikola Takes Drastic Measure With 1-For-30 Reverse Stock Split

Posted June 20, 2024 at 10:30 am
Finimize Newsroom
Finimize

What’s going on here?

Nikola just announced a 1-for-30 reverse stock split to comply with Nasdaq’s listing rules and boost its plummeting stock price, effective June 25, 2024.

What does this mean?

This reverse stock split will consolidate 30 shares of Nikola into one, reducing the number of outstanding shares and increasing the share price. The move aims to avoid delisting from Nasdaq, following a tough period. The electric and hydrogen truck maker saw its stock fall over 15% to a new low of 40 cents and recorded a cash reserve drop to $345.6 million as of March 31, 2024. With first-quarter revenue missing Wall Street expectations due to fewer hydrogen truck deliveries, Nikola’s market capitalization now stands at approximately $652 million.

Why should I care?

For markets: Riding uncertainty.

Nikola’s reverse stock split is meant to meet exchange standards and create a better market perception by elevating its share price. Despite this, Nikola’s stock had already declined about 45% earlier in the year. This volatility raises concerns about the firm’s future, so investors should follow its strategies closely.

The bigger picture: Reviving a faltering giant.

Nikola’s financial troubles, marked by declining cash reserves and unmet revenue expectations, highlight the challenges faced by emerging tech companies in the competitive EV market. This reverse stock split is crucial for Nikola to stay listed on Nasdaq and signal strength to the market. However, long-term success will depend on operational adjustments and meeting delivery targets.

Originally Posted June 20, 2024 – Nikola Takes Drastic Measure With 1-For-30 Reverse Stock Split

Join The Conversation

If you have a general question, it may already be covered in our FAQs. If you have an account-specific question or concern, please reach out to Client Services.

2 thoughts on “Nikola Takes Drastic Measure With 1-For-30 Reverse Stock Split”

  • Dan

    Hey, so I had 100 shares and after split have 3. Where did the fraction go???

    • Interactive Brokers

      Hello, thank you for reaching out. Fractional positions are liquidated if:

      An account is not set up to hold or trade fractions.
      If the security allocated is not listed on IB’s Frac-Exchange.

      We hope this helps!

Leave a Reply

Disclosure: Interactive Brokers

Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Finimize and is being posted with its permission. The views expressed in this material are solely those of the author and/or Finimize and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.