Phoenix-based electric truck maker, Nikola, witnessed a sharp decline in its shares on Thursday as the company announced the pricing of a new stock offering and sought to issue $175 million in new debt. The news prompted investors to sell off their holdings, dragging the stock price down by 22% to close at 76 cents. The downward trend continued on Friday morning with shares plummeting to 70 cents during Nasdaq trading.

Nikola's move to raise additional capital comes amidst mounting financial concerns. The company had already filed a notice of going concern with the Securities and Exchange Commission, stating that it may face a shortage of funds within the next 12 months, possibly requiring the modification or termination of its business operations.

As of the end of September, Nikola reported cash and equivalents worth $362.8 million, which was believed to be sufficient to cover recall expenses and sustain the company's operations until 2024. However, the recent developments have raised doubts about the long-term viability of the electric truck maker.

The stock offering involves the sale of 133.3 million new shares, and the debt issuance would consist of green convertible senior bonds paying an annual interest rate of 8.25% and maturing in 2026. The announcement caused a significant drop in Nikola's stock price, pushing it below the offering price of 75 cents.

Henrik Alex, a prominent investor on the Seeking Alpha website, expressed pessimism about Nikola's future prospects. In a recent post, Alex highlighted the company's ongoing need for substantial funding and warned of further dilution for common shareholders. He advised investors to sell their existing positions and explore alternative opportunities.

Nikola's financial struggles were further exacerbated by the fallout from the recall of 209 electric trucks in August due to underhood fires. The company set aside $61.8 million to replace the battery packs in these vehicles.

With the latest stock offering and debt issuance failing to restore confidence, Nikola finds itself in a precarious situation. CEO Steve Girsky has temporarily assumed the responsibilities of the resigned CFO, Stasy Pasterick, as the company grapples with its financial challenges.

The future of Nikola remains uncertain as it navigates the obstacles posed by the funding crisis and the declining confidence of investors. The company must find a way to address its financial woes if it hopes to withstand the mounting pressure and secure its long-term survival in the highly competitive electric vehicle market.