Nikola Stock Sees Surge Due to Potential Cash Infusion
Nikola, a prominent automotive company (ticker: NKLA), is experiencing a rise in its stock value due to the possibility of a significant cash infusion from an unexpected source. On October 20th, an arbitrator mandated that Trevor Milton, the company's founder and former CEO, pay Nikola $165 million as a result of his involvement in securities fraud during the company's development. This information was disclosed in a filing with the Securities and Exchange Commission.
Upon being approached for further comment, Nikola pointed to its SEC filing and refrained from providing additional details. Trevor Milton was unavailable for immediate contact at the time of reporting.
As a consequence of this news, Nikola's stock witnessed a considerable increase of 9% during Tuesday's trading session. In comparison, the S&P 500 and Nasdaq Composite also experienced gains of 0.7% and 0.9%, respectively.
The rise in stock value has contributed approximately $80 million to Nikola's market capitalization, representing roughly half of the amount awarded. The exact amount that Nikola will ultimately receive from the award remains unclear.
As of the end of the second quarter, Nikola possessed over $225 million in cash reserves. Analysts anticipate that the company will allocate around $100 million per quarter over the next few quarters to sustain its business expansion.
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