Why Nikola Stock Crashed in August

Core Viewpoint - Investing in Nikola is a bet on the company's ability to maintain cash flow while pursuing its ambitious hydrogen infrastructure plans for fuel cell electric heavy-duty trucks [1][9] Group 1: Company Progress and Challenges - Nikola has made progress in establishing a hydrogen production and fueling infrastructure, focusing on short-haul trucking needs near North American ports [1] - The company sold 72 hydrogen fuel cell electric trucks in the second quarter, generating over $31 million in revenue, aided by regulatory credits [4] - Despite record revenue in the second quarter, Nikola's stock experienced a significant decline of 26.2% in August, raising concerns among investors about the risk-reward balance [2][3] Group 2: Financial Performance - Nikola's net loss from operations improved year-over-year, ending the second quarter with $256 million in unrestricted cash, although this was $90 million less than the beginning of the quarter [7] - The company announced a capital raise of $80 million through convertible notes, with potential for an additional $500 million from future security sales, indicating ongoing liquidity needs [8][9] Group 3: Infrastructure Development - Nikola is investing in renewable energy infrastructure, including hydrogen fuel stations and mobile fueling trucks, with recent openings in Toronto and Southern California [5][6] - The CEO emphasized the company's commitment to operational reality and infrastructure development, but acknowledged the financial costs associated with these initiatives [6]