While many pockets of the market are starting to feel like 2021 again (just check out the crypto rally we’re seeing lately), certain previous high-flyers haven’t felt the love to the same degree. Nikola (NASDAQ:NKLA) is one such company struggling to regain optimism. Shares of NKLA stock are down another 6% today and trading firmly at penny-stock levels.
Today’s move comes after the company announced its new Chief Financial Officer. Thomas Okray will be taking over the position, which has been managed by Stephen Girsky, the current CEO of Nikola. Girsky took over this role on an interim basis after the company’s previous CFO resigned late last year.
Management shakeups can take place for a variety of reasons and such moves can often impact a given company’s stock price in a big way. But this move appears to be one that shouldn’t have moved the needle in such a negative way today. That suggests investors may be focusing more on Nikola’s core business than its current executive team.
Let’s dive into what to make of today’s move.
Why Is NKLA Stock Down Today?
Nikola’s vision to pioneer innovative solutions for a zero-emissions world is one many investors have previously gotten behind. A remnant of the 2020 special purpose acquisition company (SPAC) era, NKLA stock surged from an initial offering price of $10 per share to nearly $80 per share in mid-2020 before declining to its current level below 70 cents today.
Much of this decline has to do with the company’s commercialization efforts and timeline. Many expected the electric vehicle (EV) and hydrogen truck maker to have hundreds if not thousands of vehicles on the roads by now. And with so much government spending on infrastructure projects (many of which are aimed at improving hydrogen infrastructure around the U.S.), it wouldn’t be absurd to expect Nikola to have been one the biggest beneficiaries of this trend.
Unfortunately, initial expectations have not played out. What’s more, while Nikola expects to receive revenue from its first 35 hydrogen-cell electric trucks recently sold to dealers, this quarterly revenue number is likely to be small, with the company continuing to produce massive losses.
It’s a difficult environment for companies to raise additional capital, so until Nikola is able to show a path to profitability and sustained production growth, NKLA stock will likely remain in the doldrums of the market. Today’s announcement is doing little to change that reality.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
