Nikola (NKLA) shares plummet following delisting notice

May 25, 2023 11:51 AM EDT

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Nikola Corp. (NASDAQ: NKLA) announced on Thursday that it has been issued a delisting notice by Nasdaq due to its failure to meet the minimum bid price requirements set by the exchange.

Shares of the company sank more than 15% to 65 cents by mid-day. They fell about 78% last year on high battery material costs and production concerns.

Like other electric vehicle (EV) companies, Nikola has been exploring equity sales to raise cash for its operations. Management is urging shareholders to vote in favor of increasing the number of shares at their annual shareholder meeting next month.

EV startup Lordstown Motors Corp (NASDAQ: RIDE) got hit with a similar notice last month. The electric automaker enacted a reverse stock split to meet the exchange's rules.

Earlier this month, Nikola announced that it would temporarily halt production at its Coolidge, Arizona factory in order to optimize the assembly line. This decision was made in response to the sluggish demand for its battery-powered trucks.

Shares of NKLA are down 19% in mid-day trading on Thursday, while shares of RIDE are up 6.17%.

By Michael Elkins | [email protected]

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