Shares of future electric and hydrogen fuel cell vehicle maker Nikola (NKLA -5.05%) were trading down 7% today, as of 3:45 p.m. EST. Shares are currently trading below $17 for the first time since the company went public through its merger with VectorIQ in June 2020.
Nikola has been the focus of much news in the last three months, including accusations of fraud from short-seller Hindenburg Research and on again, off again partnership talks with General Motors (GM 0.72%). Today's move, however, is likely more related to news from other electric-vehicle (EV) companies.
Chinese EV makers Nio (NIO -1.47%) and XPeng (XPEV -5.31%) came out with news today regarding share offerings that are dilutive to current shareholders. Investors may think that Nikola will do the same.
There are, however, many differences between the Nikola and the Chinese EV automakers. The main one is that both Nio and XPeng are producing vehicles and growing revenue. Capital raised by both companies will be invested into an already expanding business. XPeng said it may even use the money for possible strategic acquisitions in the industry.
Another difference is the fact that Nio and XPeng were taking advantage of soaring share prices in recent months to raise money for growth.
If Nikola decided to sell more shares at today's prices, there would be more for existing shareholders to be concerned about than today's drop.