Shares of Nikola Plunged Again This Week. Here's Why.

Core Viewpoint - Nikola continues to experience significant stock declines, with shares down over 99% from all-time highs, primarily due to ongoing insider selling and a lack of profitability [1][5]. Insider Selling and Business Performance - Key executives, including the COO, CFO, and president, are selling their stakes in Nikola, which is a concerning indicator of management's confidence in the business [3]. - The company reported only $31 million in revenue last quarter, alongside a net loss of $134 million, indicating a substantial distance from profitability [4]. - Over the past 12 months, Nikola has burned $500 million in free cash flow against less than $50 million in sales, highlighting severe cash flow issues [4]. Shares Outstanding - Nikola's shares outstanding have increased by 300% over the last few years, a significant red flag that suggests the company is selling more stock to finance operations due to cash burn [6][7]. - The continuous increase in shares outstanding indicates that Nikola is struggling to maintain operations without resorting to equity financing, which is typical of unprofitable companies [6].