Electric truck maker Nikola Corp (NASDAQ:NKLA) revealed Thursday evening that it has received sufficient backing for a proposal to raise the allowable number of shares it can issue, paving the way for acquiring much-needed capital.
Nikola faced multiple attempts before successfully passing the proposal, with the most recent attempt taking place last month. The company adjourned its shareholder meeting to revisit the matter.
In mid-July, Governor John Carney of Delaware signed a new law requiring only a majority of shares voting on the proposal for it to pass, and on Thursday, Nikola achieved their desired outcome. Before the rule change, a vote to increase shares required a majority, or about 400 million proxies, equal to 50% plus one of all outstanding shares.
Chief Executive Michael Lohscheller emphasized the significance of the plan in a statement saying that the plan is “critical for continued growth and success as we move forward with our strategic priorities,” including the recent launch of a hydrogen fuel-cell electric vehicle.
The company did not provide details of the voting.
Nikola's founder and primary shareholder, Trevor Milton, was a vocal opponent of the vote. Milton resigned from Nikola in 2020 amidst accusations of fraud made by a Wall Street short-seller. Subsequently, he faced legal repercussions and was found guilty of fraud for allegedly providing false information to investors about Nikola's technology.
Shares of NKLA are down 9.8% in pre-market trading Friday morning.