Electric vehicle maker Nikola (NKLA) is looking at different ways to address its cash crunch, which includes selling parts of its business or the entire company, according to Bloomberg News. Other options that are on the table are potential partnerships or new funding.
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Nikola has been struggling with high production costs for its fuel-cell electric truck, which has severely impacted its cash reserves. In fact, as of September, the company’s cash and cash equivalents had dwindled to $198.3 million, down from $464.7 million at the end of 2023. This significant decline has led to speculation that Nikola may be getting ready to file for bankruptcy.
Unsurprisingly, the firm’s financial issues have caused its shares to lose nearly 96% of their value over the past year. It also did not help when CEO Stephen Girsky acknowledged the need for more capital during an investor call in October and stated that the company was “actively talking to lots of potential different partners.”
Is NKLA a Good Stock to Buy?
Overall, Wall Street has a Hold consensus rating on NKLA stock, based on one Buy and four Holds. Furthermore, the average NKLA price target of $5.50 per share implies a nearly 500% upside from current levels.
