NKLA Shares Slump After New Filing

But this is not a bubblicious top at all…

After soaring by 100s of percent in the last few weeks, Nikola has issued a filing that appears to register up to around 53 million shares…

That’s registering the Pipe shares and warrants from the merger. Not a offering to sell stock. We are doing awesome financially and have over 700MM cash on hand.

— Trevor Milton (@nikolatrevor) June 15, 2020

NKLA shares are down 11% after hours…

The company had 360.9m shares outstanding (183.1m-share float) as of June 3 so the new warrant registrations could lead to around a 13% dilution or pre-money shares.

If you’re thinking of buying here are the risks (as explained by the company):

Risks Related to the Company’s Business and Industry

We are an early stage company with a history of losses, and expect to incur significant expenses and continuing losses for the foreseeable future.

We incurred a net loss of $88.7 million for the year ended December 31, 2019 and have incurred net losses of approximately $188.5 million from our inception through December 31, 2019. We believe that we will continue to incur operating and net losses each quarter until at least the time we begin significant deliveries of our trucks, which is not expected to begin until 2021 for our Nikola Tre BEV and 2023 for our Nikola Two FCEV, and may occur later. Even if we are able to successfully develop and sell or lease our trucks, there can be no assurance that they will be commercially successful. Our potential profitability is dependent upon the successful development and successful commercial introduction and acceptance of our trucks and our hydrogen station platform, which may not occur.

We expect the rate at which we will incur losses to be significantly high in future periods as we:

• design, develop and manufacture our trucks;

• construct and equip our planned manufacturing plant to produce our trucks in Arizona;

• modify and equip the Iveco manufacturing plant in Germany to produce our trucks in Europe;

• build up inventories of parts and components for our trucks;

• manufacture an available inventory of our trucks;

• develop and deploy our hydrogen fueling stations;

• expand our design, development, maintenance and repair capabilities;

• increase our sales and marketing activities and develop our distribution infrastructure; and

• increase our general and administrative functions to support our growing operations.

Because we will incur the costs and expenses from these efforts before we receive any incremental revenues with respect thereto, our losses in future periods will be significant. In addition, we may find that these efforts are more expensive than we currently anticipate or that these efforts may not result in revenues, which would further increase our losses.

We may be unable to adequately control the costs associated with our operations.

We will require significant capital to develop and grow our business, including developing and manufacturing our trucks, building our manufacturing plant and building our brand. We expect to incur significant expenses which will impact our profitability, including research and development expenses, raw material procurement costs, leases, sales and distribution expenses as we build our brand and market our trucks and bundled leasing model, and general and administrative expenses as we scale our operations. In addition, we may incur significant costs in connection with our services.