Entering text into the input field will update the search result below

Nikola attracts $200M investment from institutional investor

May 02, 2022 8:46 AM ETNikola Corporation (NKLA)By: Clark Schultz, SA News Editor11 Comments

abstract financial bar chart with uptrend line graph on blue colour background

champc/iStock via Getty Images

  • Nikola Corporation (NASDAQ:NKLA) announced that an institutional investor Antara Capital has agreed to make a $200 million investment in Nikola through the purchase of convertible senior notes.
  • The notes are due in 2026 and will bear

Recommended For You

Comments (11)

Have a tip? Submit confidentially to our News team. Found a factual error? Report here.

munhoi profile picture
Hidenberg was right they did not disappoint from being now a scam dilution machine throwing all existing shareholder sunder in this case under their trucks
Buy….Simple….Buy …More…. Next Gen Of Trucks….Future is Here….
Krzysztof Kowalczyk profile picture
$200 million is nothing. For reference, Rivian just disclosed that they've spent $2 billion+ in a single quarter Q1. And they are not making many cars yet.

Nikola burn rate in past quarters was $200million+ per quarter. And that was before they were making cars. The real expenses start when you have to buy car making equipment, car parts and hire people to assemble those cars.

This is not "investment" but a loan. Nikola will either have to repay it from cashflow (fat chance) or with shares i.e. by diluting existing shareholders. I can't quite tell from the language, but if they'll pay in shares, they'll be at a significant discount. Which implies Nikola can't just sell shares on the open market to raise money (without immediately tanking the share price) so the scammers that they are, they are disguising this as "investement" that will tank the stock price in the future.

Finally, 8-11% interest rate seems high to me. When Tesla issued convertible bonds (at a time everyone was telling us how they are going bankrupt soon), a five-year bond had 0.25% interest rate and seven-year bond was 1.25%.

8% for 4-year bond seems like desperation.
Harm Hoeksema profile picture
@Krzysztof Kowalczyk still i wonder why that hedge fund even gave them 200M.

If they would really ramp up electric trucks production I wouldn't be so negative on them. Instead of assembling EU made trucks.
They bought debt and not equity. Not much of a vote of confidence in the company unfortunately
This makes the common stock basically worthless. This investor basically owns the company now.
@123semi Explain?
Jonathan Smart profile picture
@SD_Dude It's called "lend to own". They're above the equity holders so in the event of a (likely) bankruptcy, they'll end up owning the company while equity holders get wiped out.
@Jonathan Smart This is how most financing works, especially high risk. Year ago, I lost my capital in Charter Comm., which was a very stable company. Equity is always risky.

Earlier I posted a question if this company is a buy now. I would prefer to buy their convertible debt if possible. I believe in their approach, so I don't mind investing less than 1% of my assets as play money.
Is it time to buy this stock?
TrackAddict profile picture
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.