Hydrogen electrical trucking startup Nikola Corp. filed for Chapter 11 bankruptcy protection Wednesday after it didn’t discover a purchaser or safe extra funds to keep up operations.
Nikola was as soon as a Silicon Valley darling, valued at $30 billion in June 2020 after it went public by a particular function acquisition merger. However a sequence of scandals surrounding its founder and former CEO Trevor Milton put the corporate into free fall.
Now, Nikola plans to go to public sale with its belongings, pending court docket approval, in line with a regulatory submitting.
“Like different corporations within the electrical car business, we have now confronted varied market and macroeconomic components which have impacted our means to function,” Steve Girsky, president and CEO of Nikola, mentioned in a press release.
“In latest months, we have now taken quite a few actions to lift capital, cut back our liabilities, clear up our stability sheet and protect money to maintain our operations. Sadly, our best possible efforts haven’t been sufficient to beat these important challenges, and the Board has decided that Chapter 11 represents the absolute best path ahead below the circumstances for the Firm and its stakeholders.”
The corporate has about $47 million in money readily available to fund its chapter course of. Nikola’s proposed bidding course of would permit events to submit binding gives to amass Nikola’s belongings, unbiased of the corporate’s debt or liabilities.
A few of these belongings would come with Nikola’s Class 8 hydrogen gasoline cell electrical vans and battery electrical truck platforms. Nikola had additionally been within the technique of growing a HYLA hydrogen refueling freeway in California.
The chapter submitting caps a yearslong unraveling. Nikola had been thought-about a golden instance of a SPAC gone proper, and had even closed a multi-billion greenback take care of Basic Motors. Till Milton was accused of fraud for making exaggerated claims concerning the firm’s electrical truck know-how.
Prosecutors within the case towards Milton claimed that he had deceived traders since 2019 by mendacity about Nikola having constructed a truck from the “floor up” and growing batteries that had been really purchased elsewhere.
Then there was the infamous Nikola marketing video that reveals a truck showing to drive by itself energy. In actuality, it was rolling down a hill.
Following that video, a report from short-seller Hindenburg Analysis known as the corporate a fraud, and Milton stepped down in September 2020. He was convicted of wire and securities fraud in 2022. He’s at present out on bail whereas he appeals his four-year prison sentence.
Nikola in the end paid a $125 million penalty in a settlement with the U.S. Securities and Trade Fee. The corporate’s inventory collapsed, leading to critical losses for traders, in addition to the corporate.
Nikola had been making an attempt to lift sufficient capital to proceed operations ever since. Most lately, in December 2024, Nikola tried to raise $100 million in a typical inventory sale to repay its money owed and lift fairness, after warning traders the month earlier than throughout its third-quarter earnings name that the corporate solely had sufficient money to assist its enterprise into Q1 2025.
Nikola reported $198 million in money on the finish of the third quarter.