Nikola’s stock drops after appointing fourth CEO in four years

Nikola's stock drops after appointing fourth CEO in four years

Nikola Names New CEO Amidst Ongoing Challenges

Nikola

In a move to tackle the myriad of obstacles it has been facing, electric truck manufacturer Nikola has announced the appointment of its fourth CEO in as many years. This decision comes at a crucial time as the company deals with depleting cash reserves, supply chain constraints, and a shift towards hydrogen fuel cell technology. However, the news seems to have shaken investors, with Nikola’s shares plummeting nearly 12% in pre-market trading.

Taking the helm of Nikola is Stephen Girsky, who previously served on the board of General Motors (GM) and advised the CEO and finance chief of the automotive giant. This transition comes after Michael Lohscheller, the previous CEO, announced his departure citing a family health matter. Lohscheller will continue to serve in an advisory capacity until the end of September.

Despite the challenges, there is some positive news for Nikola. The company reported a narrower second-quarter loss, attributing this improvement to lower production of its Tre battery-electric trucks, which helped control costs. Nonetheless, Nikola’s struggle with dwindling cash reserves remains a pressing concern as it continues to ramp up truck production.

Interestingly, a proposal allowing Nikola to issue more shares in order to raise funds was approved by investors just a day before the CEO announcement. This move, however, has sparked debates, with founder Trevor Milton expressing the opinion that what Nikola truly needs is new leadership rather than additional shares. Milton himself stepped down as CEO of the company in 2020, following accusations by short seller Hindenburg Research labeling Nikola a “fraud.”

Adding to its challenges, Nikola recently decided to liquidate the assets of battery maker Romeo Power, which it acquired less than a year ago for $144 million. This decision highlights the tough choices the company is making to address its financial situation.

Upon Girsky’s appointment as CEO, Steve Shindler, a board member since 2020, will take on the role of chairman. The company hopes that this change in leadership will bring about a much-needed shift in fortunes.

While the stock market initially reacted with a decline in share prices, it is worth noting that leadership changes can provide an opportunity for companies to reassess their strategies and regain investor confidence. With the challenges at hand, Nikola and its new CEO have an uphill battle ahead. As the company navigates these obstacles, it will be interesting to see how they leverage their expertise in hydrogen fuel cell technology to make a mark in the electric truck market.

(This story has been corrected to state that Stephen Girsky will take over immediately, not at the end of the month, as mentioned in paragraph 2)

OPEC+ maintains unchanged oil output policy
OPEC+ panel meets amid stronger oil market
Alphabet, parent company of Google, sells a...
Corporate health measures indicate red alert
TikTok in talks for Indonesian payments lic...
Amazon’s Frankfurt-listed shares expe...
Reviews

Reviews