Battery and hydrogen fuel cell electric truck maker Nikola (NASDAQ:NKLA) reported its second-quarter financial update this morning, and investors are reacting strongly. Shares initially spiked as the company reported a smaller loss than analysts expected. But the stock quickly reversed course when the company gave its outlook. At 11:45 a.m. EDT, Nikola shares were down about 7.7%, near its lows of the day.
Nikola reported a net loss of $0.20 per share, which was better than expectations of a $0.29 loss. But details related to production and revenue prospects for the remainder of 2021 spooked investors. The company had previously forecast revenue of between $15 million and $30 million this year, but now says that supply chain issues forced it to lower that range to between $0 and $7.5 million, according to CNBC.
Nikola CEO Mark Russell said on the company's conference call with investors that supply disruptions will mean the company expects to deliver no more than 50 units this year. It previously said it could deliver between 50 and 100 units for the year.
The slowdown in progress toward initial commercial production also comes a week after Trevor Milton, the company's founder and former executive chairman, was indicted for misleading investors about Nikola's technology last year.
The company responded to that news with a statement reminding investors that Milton has not been involved in Nikola's operations or communications since he resigned in Sept. 2020. It also highlighted that the charges were against Milton individually, and not against the company. But it is still a stain on the company's reputation and leaves investors with some uncertainty as to whether the investigation could expand to include current employees.
That risk, along with a slowdown in its progress to commercialize its products, has investors selling the stock today.