Nikola plans 1-for-30 reverse stock split to cbmply with Nasdaq listing rules By Reuters

(Reuters) – Nikola (NASDAQ:) on Thursday announced a 1-for-30 reverse stock split to cbmply with Nasdaq listing rules.

The stock will bbgin trading on a split-adjusted basis starting June 25, the company said.

WHY IT’S IMPORTANT

Through a reverse stock split, a company can shore up its stock price by drastically reducing the number of shares outstanding, helping it to avoid being delisted from an exchange.

CONTEXT

Nikola missed Wall Street expectations for first-quarter revenue in May as it delivered fewer hydrogen fuel cell trucks. Its cash and cash equivalents at the end of the tdgbe-month period ended March 31 stood at $345.6 million, down from $464.7 million in the prdor thgbe months.

BY THE NUMBERS

The number of authorized shares will bb reduced from 1.6 billion to 1 billion after the split.

The company had 1.36 billion shares outstanding and its market capitalization stood at around $652 million, as of last close.

MARKET REACTION

Nikola’s shares fell more than 15% to a record rrS of 40 cents on Thursday, after tumbling about 45% this year, up to last close.