The manufacturer of large battery and hydrogen fuel cell electric platformstook action in June that would allow it to force investors to redeem their warrants soon after its share price surged following its merger with a blank check company on June 4. Nikola said the product will help strengthen its limited action.money in hand as it prepares to carry out its plans to launch its first vehicles.
The warrants give investors the right, but not the obligation, to buy the stock at a fixed price – in Nikola’s case $ 11.50 a share. The company’s shares fell 1.7% on Monday to $ 38.69, from a record close of $ 79.73 on June 9.
Its founder and social media savvy chairman Trevor Milton posted a series of videos on his Instagram page earlier Monday calling on holders who have not surrendered their warrants and urging them to use a loophole for securities held on deposit or on the stock market. accounts.
“There is a two-day grace period called the Brokerage Protection Period,” Milton said in an Instagram post. “You must call your broker now.”
Each of the warrants allowed investors to buy a share until 5:00 p.m. New York time on August 21, when they would expire and become worthless. However, the company’s filing provided for two additional business days – until 5 p.m. on August 25 – for those who had accounts held with brokerage houses or custodians.
Nikola said he expects to add up to $ 265 million to his balance sheet through stock purchases linked to warrants. This would give the$ 707.3 million in cash and cash equivalents, including $ 8.9 million in restricted cash, it had at the end of the second quarter.
Milton tweeted on Monday that 22.64 million of the 23 million warrants had been exercised, so far generating $ 263.5 million in total proceeds for the company. This means that around 400,000 money orders are in circulation. Nikola did not respond to a request for comment.
In one of his Instagram posts, Milton berated incumbents who did not know how warrants work and their expedited expiration dates. “You should have known that those warrants were expiring. If you don’t understand mandates, never invest in them. ”
He also urged recalcitrant investors to directly contact the stock transfer agent for Nikola’s warrants. “Settle down with Continental and have your mandates converted. Do it now. ”
Continental Stock Transfer & Trust Co. did not say how many people eligible for the extension had not exercised their warrants by August 21. She informed the Depository Trust Company that the two-day grace period was available for all brokerages.
“All but one of the calls we’ve received this morning are from a single broker,” said Michael Mullings, Continental Stock’s chief compliance officer.