Electric Truck maker Nikola says it has won shareholder approval to issue new stock. The announcement was made on Tuesday. For two months now, Nikola has been trying to win enough votes to overcome the objection of its since-departed founder, who voted his 20% interest against the proposal.
Now the company can increase its outstanding shares from 600 million to 800 million, allowing it to issue new funds as needed to raise cash. According to Nikola, 66% of the total votes cast, or more than 211 million shares, were in favor of the proposal.
Owners of at least 50% of the company’s outstanding shares must approve the measure for it to pass.
After Nikola’s former CEO and chairman, Trevor Milton, voted against the proposal at the company’s annual shareholders’ meeting, the meeting was adjourned. In both instances, the meeting was briefly resumed on June 30 and July 18, but was adjourned again after the total votes in favor did not reach the threshold.
Milton, the man who founded Nikola in 2014, left the company in September 2020 following allegations of fraud. He still owns the majority of the company. Milton owns about 11% of Nikola’s stock outright and also owns a 9% stake in a company that he co-owns, giving him about 90 million shares of Nikola’s stock, or about 9% of its total ownership.
Milton was indicted by a federal grand jury on four counts of fraud related to representations he made to potential Nikola investors. Milton is scheduled to be tried beginning in September. He has denied the allegations.
Nikola said that it has agreed to acquire battery-pack supplier Romeo Power in a $144 million, all-stock transaction. On Thursday, before the U.S. markets open, the truck maker will report its second-quarter results.