Nikola shareholders approve measure to issue new shares over ex-CEO Trevor Milton’s objection

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Nikola Motor Company

Source: Nikola Motor Company

Electric truck manufacturer Nikola has finally received shareholder approval to issue new shares, the company said Tuesday. Nikola has been trying to win enough votes for two months to allay the objection of the now-deceased founder, who had previously voted against the proposal with his 20% stake in Nikola.

The company said it can now increase its total outstanding shares from 600 million to 800 million, giving it flexibility to raise cash by issuing new funds as needed. More than 66% of the total votes cast, or more than 211 million shares, were in favor of the proposal, Nikola said in a statement.

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The measure required owner approval of at least 50% of the company’s outstanding shares to pass.

The company’s annual shareholders’ meeting on June 1 was adjourned after Nikola’s founder and former CEO and chairman, Trevor Milton, voted against the proposal. The meeting was briefly resumed on June 30 and again on July 18, but was adjourned again on both occasions because the total number of votes in favor of the required threshold had not been reached.

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Milton, who founded Nikola in 2014, left the company in September 2020 following allegations of fraud. He remains the company’s largest shareholder. Milton owns approximately 11% of Nikola’s stock and manages an additional 9% through an investment vehicle he co-owns, giving him effective control over approximately 90 million shares of Nikola’s stock.

Milton was indicted by a federal grand jury on four counts of fraud related to statements he made to potential Nikola investors. His trial begins in September. Milton has denied the allegations.

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Nikola said Monday it has agreed to acquire battery pack supplier Romeo Power in a $144 million all-share transaction, for which it will not have to issue new shares. The truck maker is expected to report its second-quarter results — and its plans for the additional stock — before U.S. markets open on Thursday.