Nikola Corporation (NASDAQ:NKLA) has filed for Chapter 11 bankruptcy, ending a rocky journey for the electric truck maker. The company voluntarily submitted its petition in the U.S. Bankruptcy Court for the District of Delaware and is now seeking court approval to auction off its assets under Section 363 of the U.S. Bankruptcy Code.
For now, Nikola plans to keep some services running, including HYLA fueling operations, but only through March. After that, it will need partners to take over support. The company has $47 million in cash on hand to keep things going while it sells off assets and works through bankruptcy. Given its financial struggles, Nikola is pushing for a fast sale to avoid burning through liquidity. CEO Steve Girsky acknowledged the company's struggles, saying Nikola, like other EV makers, faced tough market conditions and took steps to raise cash, cut costs, and clean up its balance sheet.
Our best efforts weren't enough, he admitted, calling Chapter 11 the best option. Nikola's story began in 2014, founded by Trevor Milton with a vision for zero-emission trucks. Investors were excited when it unveiled the Nikola One hydrogen-electric semi in 2016. The company went public in 2020 via SPAC merger with VectoIQ Acquisition Corp., but things took a turn when fraud allegations surfaced. Milton resigned as Executive Chairman, and Nikola never quite recovered. Now, after years of financial struggles, it's looking to sell off assets and move forward under new ownership.
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