Why Is Nikola Stock Trading Lower Wednesday
Nikola Corp (NASDAQ:NKLA) stock is trading lower Wednesday after reports indicated its plans to liquidate the assets of battery maker Romeo Power less than a year after buying it.
The electric truck maker struggled to satisfy investors amid overblown costs of commodities and tight access to capital since 2022, Reuters reports.
Nikola, in August, agreed to buy Romeo Power for about $144 million in stock.
Romeo Power is one of the battery suppliers for Nikola, along with LG Energy Solution and Proterra Inc (NASDAQ:PTRA)
Nikola's struggles mirror those at many other EV startups. British EV van maker Arrival (NASDAQ:ARVL) shared plans to terminate its merger with a blank-check firm, while Lordstown Motors Corp (NASDAQ:RIDE) filed for bankruptcy.
Lordstown Motors filed for Chapter 11 bankruptcy after its rescue deal with Hon Hai Precision Industry Co Ltd (OTC: HNHPF)
Foxconn failed. The deal involved Foxconn injecting cash and taking over production for Lordstown Motors.
In contrast, Tesla Inc (NASDAQ:TSLA) topped market expectations for second-quarter deliveries courtesy of price cuts and U.S. federal credits.
Price Action: NKLA shares traded lower by 6.57% at $1.28 premarket on the last check Wednesday.