What happened
Nikola (NKLA +0.00%) shares have been on a roll in June, and that boost brought good news for the company. After having soared by more than 125% this month, Nikola stock jumped again by as much as 14% Friday morning after the company announced it is back in market listing compliance. As of 10:39 a.m. ET, shares remained up by 12.3%.
OTC: NKLA
Key Data Points
So what
The electric vehicle (EV) maker's stock price gains have now brought it back into compliance with the Nasdaq Stock Exchange's listing requirements, the company said in a filing Thursday. Nasdaq requires, among other things, that companies listed on its exchange maintain a minimum $1 share price. Nikola's share price dropped below that level in April, but it has now been back above that minimum for the required 10 consecutive business days.
That's also good news for shareholders as Nikola will likely need to continue to use capital markets to raise additional funds as it works to grow its electric heavy truck business.
Now what
Several things contributed to the recent rise in the stock price. Nikola shares have been heavily shorted, and many of those short-sellers may have decided to lock in their profits, which would have required them to purchase shares to cover their short positions. The EV company also expects to see a proposal to allow additional shares to be issued to pass when it reconvenes its shareholder meeting next week.
Friday's jump is occurring because had Nikola shares been delisted, many investors would likely have given up on the company and the stock. With this reprieve comes new promise that the business can ramp up and generate sustainable revenue, and investors who want to speculate on that promise are pushing the stock higher.
