After a week of doubling the number of shares outstanding and exposing existing shareholders to dilution, Nikola shares are plummeting.
Former CEO Mark Russell and current executives of an electric truck and hydrogen distribution startup are among the vendors. A company spokesperson said the current executives are covering taxes on their stock awards rather than cash.
Share price of Nikola (NASDAQ: NKLA) fell from $3.39 on Aug. 3 to $1.91 on Friday.
Former CEO Russell makes $8.3 million a week
Russell was Fired as CEO in November before his planned retirement in January. He shifted most of his options given to him in February 2019 when he joined Nikola as President. He has not been re-nominated as a director this year.
At one time, Russell had more than 8 million options. In cashless transactions this week, he converted 3.63 million of them with a strike price of $1.06 each into total returns of $8.3 million.
Russell owns approximately 40 million shares of Nikola stock in an entity called T&M Residual that was formed with company founder Trevor Melton. Melton faces judgment in US District Court in Manhattan on September 22 on three federal fraud convictions. Russell Testified as a corroboration witness At trial in September.
Russell declined to comment on Friday about continued divestment. After announcing his planned retirement in August, he placed a 10b-5 arrangement with the Securities and Exchange Commission that allowed him to sell predetermined amounts of converted options at certain prices.
This arrangement appears to have expired in May. It produced near-daily reports on Russell’s share sales, which prompted the board of directors to move up the date of his planned retirement.
Michael Loescheler, appointed as President in February 2022, He succeeded Russell as CEO. He resigned on August 4 due to a family health issue. Steve Jersky replaced Lohscheller. Girsky relinquishes his role as boss to become Nikola Third CEO in less than a year.
On Thursday, he sold 68,985 shares of his newly acquired stock grant, using $135,000 to cover taxes. As a group, Nikola’s five senior officers sold 290,769 shares for a total of $569,411.
“Our executives here are completely dedicated to the company and its success – they simply pay taxes,” spokesman Dan Bass said in an email.
I canceled the $1 a year salary plan
The leadership team agreed in May 2021 to take Individual stipends of $1 per year for three years In exchange for the opportunity to receive huge payouts if Nikola shares reach certain price limits.
In April, it was The council canceled that plan It agreed to pay Lohscheller $1 million in cash salaries annually and $600,000 each to the chief legal, human resources, energy, and finance divisions. Restricted stock awards awarded through 2025 were part of the compensation plan.
A drop in the share price can reduce how much a company gets from new shares it sells on the open market.
The day after shareholders approved the proposal to increase the number of authorized shares, Nikola increased the number of shares available through a Citigroup market program to match the $600 million that Nikola needed to expand its hydrogen fuel cell truck. Production and investment in hydrogen fuel distribution.
“I am very confident that we have access to the capital that we will need to implement the business plan,” Girsky said at a roundtable with reporters last Friday.