Dear NKLA Stock Fans, Mark Your Calendars for June 6

After spending the past two quarters steadily trending downward, electric vehicle (EV) maker Nikola (NASDAQ:NKLA) has finally received a delisting notice after failing to maintain Nasdaq’s minimum $1 price requirement. NKLA stock has been in a race to the bottom since January 2023, shedding more than 70% of its value year-to-date (YTD). Although it had problems long before that, the red flags surrounding NKLA stock have only been getting harder to ignore.

Now, the possibility of losing its spot on the Nasdaq is looming as Nikola shares plunge to an all-time low. As a last ditch attempt, the EV maker is asking shareholders to vote on a proposal that could theoretically help it keep moving forward, at least for the time being. Investors have until June 6, 2023 to cast their votes.

What exactly is Proposal 2 and could its passing actually help Nikola avoid delisting? Let’s take a closer look.

What’s Happening With NKLA Stock?

Since slipping below $1 in April, NKLA stock has only lost value. This morning, InvestorPlace contributor Dana Blankenhorn reported that Nikola hit an all-time low after receiving the delisting notice. As of this writing, shares are down about 2% and show no signs of a rebound.

It has been months since Nikola gave investors anything to be optimistic about. Now, the company is teetering increasingly close to being delisted. Its Proposal 2 vote — which would let Nikola increase its authorized number of shares — can only be described as a Hail Mary pass.

Per a statement released by the company:

“Approval of this proposal will help ensure that Nikola can continue moving forward to achieve new milestones on the path to pioneering solutions for a zero-emissions world. Without these additional shares, Nikola’s ability to continue its ongoing operations and objectives, including Nikola’s need for capital, will be out of reach.”

At first glance, this sounds like an excellent thing for shareholders to vote on, which means the proposal could pass. However, investors should also see the bigger picture here. Even if the company is able to continue trading on the Nasdaq, that doesn’t make NKLA a good buy.

This company has spent the past year repeatedly proving it cannot demonstrate sustainable growth. Even when the EV maker has good news to report, shares tend to slip back into the red as quickly as they rose. In April 2022, an Evercore ISI analyst also lowered their price target for Nikola from $2 to $1. At the time, the reduction seemed harsh, but it may not have been harsh enough.

Although NKLA stock sometimes sees momentum from short squeeze speculation, that has never been enough to help push up shares. Clearly, even the r/WallStreetBets crowd isn’t interested in trying to save this fallen company.

The Road Ahead

As noted, Proposal 2 is likely to pass, as there is clear incentive for investors to vote in favor of the move. However, that doesn’t mean that Nikola will see any real growth after the vote.

This troubled EV producer has given investors far too many reasons to bet against shares. Even if NKLA stock does pop in the time leading up to June 6, it will likely reverse course just as quickly. Investors have much better options when it comes to this space — even those who are looking for opportunities in the microcap EV and penny stock categories.

On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.

Read More:Penny Stocks — How to Profit Without Getting Scammed

On the date of publication, Samuel O’Brient 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.

Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.

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