New Delhi:- Nikola is the second time since June that it has failed to gather enough shareholders to vote in favor of a proposal that would allow the electric car maker to issue more shares to raise more capital.
The company announced Thursday that it will postpone its annual shareholder meeting until August 3, after which it will again invite enough shareholders to the meeting. To vote in favor of the proposal, the company would need to secure at least 50% of all outstanding shares.
Nicolas did not get enough votes at the June 7 meeting and postponed the vote to July 6. Thanks to changes to Delaware law that are due to go into effect on August 1, the next round could be fruitful for Nicola. Under this amendment, a Delaware corporation wishing to increase its share count would only need to obtain a simple majority of the votes cast.
Also Read:- The Fascinating History of Architecture: From Ancient to Modern Structures
A bill to amend the current law was approved by the Delaware legislature and is now awaiting signature by Governor John Carney. Nikola said his own proposal to issue more shares would have been accepted if the new law had taken effect.
Nikola is one of a group of electric and mobility start-ups that have gone public through mergers with special acquisition companies before generating revenue, let alone profit. Many of them, especially Nikola, were caught up in the memetic stock boom during the pandemic and saw their share prices and market capitalization skyrocket into the stratosphere. All of these stocks are back on the ground and EV-SPACs like Nikola are looking for cash.
Also Read:- Karnataka Budget 2023: Siddaramaiah hikes tax on Alcohol
Nicola also looked at ways to cut costs. The company laid off 270 people, about 23% of its workforce, in May and announced plans to limit its electric-truck efforts to North America. About 150 employees supporting the company's European programs have been let go. Another 120 employees lost their jobs at the company's Phoenix and Coolidge, Arizona locations. About 900 employees remain.
Also Read:- The World of eSports: The Evolution of Competitive Gaming
The EV Truck maker failed to raise share capital as the votes to make this possible from their shareholders were not enough to proceed further and has now announced plans for the limitations of the Trucks in North America.