Nikola failed for the second time since June to get enough shareholders to vote on a proposal that would allow the electric truck maker to issue more shares in a bid to raise more capital.
The company said Thursday it has adjourned its annual meeting of shareholders until Aug. 3, when it will once again try to attract enough shareholders to vote in favor of the measure. The company is required to obtain more than 50% of all outstanding shares to vote in favor of the proposal.
Nicholas didn’t get enough votes at its June 7 meeting and pushed back the vote to July 6.
This next time could prove fruitful for Nikola thanks to a change in Delaware law that is set to go into effect August 1. Under this amendment, companies incorporated in Delaware that wish to increase the number of shares would only need to receive a simple majority of the votes cast. The amendment to the existing law has been approved by the Delaware state legislature and now awaits Governor John Carney’s signature.
Nikola said that if the new law had been in place, his proposal to issue more shares would have passed.
Nikola is among a group of electric vehicle and mobility startups that went public through mergers with purpose-built acquisition companies before generating revenue, let alone being profitable. Many of them, including Nikola, have been swept up in the stock meme craze during the pandemic and have seen stocks – and market capitalization – leap into the stratosphere. All of that stock crashed to earth, leaving EV SPACs like Nikola rushing for cash.
Nikola also looked for ways to cut costs. In May, the company laid off 270 employees, about 23% of its workforce, and announced plans to limit electric truck efforts to North America. About 150 workers who supported the company’s European programs have been made redundant. Another 120 employees based at the Phoenix and Coolidge, Ariz., sites also lost their jobs. About 900 employees remain.