Shares of Nikola Corp. powered up again Friday as the battle between the electric-vehicle maker and its co-founder and former chief executive officer heated up.
rallied 8.6% in morning trading toward a three-month high and an eighth straight gain. That would match the stock’s record winning streak of eight sessions, which ended Nov. 24, 2020.
The shares had skyrocketed more than 180% during its current win streak, which started the day after they closed at a record low of 54 cents on June 6. The 115.6% rally just this past week would be a weekly record for the stock, surpassing the previous record of 77.9% for the week ended June 12, 2020.
The stock had previously been falling as the company urged shareholders to approve a proposal that could pave the way for more stock sales.
“With just a few days left before the voting deadline, your vote FOR Proposal 2 allows us to increase the authorized number of shares of our company’s common stock,” the company said in a June 1 proxy filing. “This will allow Nikola to raise capital and enable us to continue working towards achieving our business plan milestones and accomplishing our company mission to pioneer solutions for a zero-emissions world.”
The shareholder vote has since been pushed back to July 6.
On Thursday, Trevor Milton, the company’s former CEO and currently Nikola’s largest shareholder, said in a social-media post that he had voted no on Proposal 2 and “withhold all” on all board members, saying the company doesn’t need new shares, it needs new leadership.
“The market has spoken since I blocked the extreme dilution proposal,” Milton said in his post. “Nikola now has a chance to avoid being delisted or suffer a reverse split thanks to my vote and all those who voted NO.”
Milton owns about 52.3 million Nikola shares, or 9.4% of the shares outstanding, according to FactSet data.
Milton resigned from Nikola in September 2020 after allegations surfaced that he had made misrepresentations about the company. In October 2022, Milton was convicted of fraud for what prosecutors said were repeated lies about the company’s products.
Nikola responded to Milton’s post by saying it “misstates the facts” as Milton is not able to “block” any proposal with his votes.
The company said even with Milton’s opposition, five out of six proposals have received the votes they need for shareholder approval, which the company believes is a sign of shareholder confidence in Nikola’s leadership.
Nikola added that Milton is in “direct violation” of his September 2020 separation agreement, as he had agreed to vote in favor of the directors nominated by the board.
“It would be easy for Mr. Milton to comply with his agreements, but his social media posts make it clear he will not,” the company stated in an 8-K filing with the Securities and Exchange Commission. “This is not the first time Mr. Milton willfully violated his obligations.”
Even with the recent rally, Nikola’s stock has tumbled 29.6% year to date, while Global X Autonomous and Electric Vehicles exchange-traded fund
has run up 32.7% and the S&P 500
has advanced 15.4%.