Electric truck maker Nikola has finally won shareholder approval to issue new stock, the company said on Tuesday. Nikola has been trying for two months to win enough votes to overcome the objection of its since-departed founder, who previously voted his 20% interest in Nikola against the proposal.
The company said it can now increase its total shares outstanding 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.
The measure required approval by owners of at least 50% of the company’s outstanding shares to pass.
The company’s June 1 annual shareholders’ meeting was adjourned after Nikola’s founder and former CEO and chairman, Trevor Milton, voted against the proposal. The meeting briefly resumed on June 30, and again on July 18, only to be adjourned again on both occasions as the total votes in favor fell short of the needed threshold.
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 about 11% of Nikola’s stock outright and controls another 9% via an investment vehicle that he co-owns, giving him effective control of about 90 million shares of Nikola’s stock.
Milton was indicted by a federal grand jury on four counts of fraud related to representations he made to potential Nikola investors. His trial is scheduled to begin in September. Milton has denied the allegations.
Nikola said on Monday that it has agreed to acquire battery-pack supplier Romeo Power in a $144 million all-stock transaction that won’t require it to issue new shares. The truck maker is expected to report its second-quarter results — and its plans for the additional shares — before the U.S. markets open on Thursday.