Nikola Sinks 10% after Announcing Share Sale

$Nikola (NKLA.US)$ 's stock dropped 10% after the company announced plans to raise funds by selling more shares to boost production of its hydrogen-powered electric vehicles. Investors typically dislike equity offerings as they dilute existing shares and suggest that the company's operations aren't sufficient to sustain growth.

Nikola plans to sell up to $160M in convertible senior notes and has filed to sell up to $500M in shares and other securities. Despite reporting a smaller loss last quarter, the company's operating cash has nearly halved since late 2023. However, insiders have shown confidence by purchasing $540,000 worth of shares in the past three months.

Analysts currently have a Moderate Buy rating on NKLA stock, with an average price target implying nearly 120% upside potential.