Nikola has about $47 million in cash on hand. (0:15) Apple unveils iPhone 16e. (3:53) See the new king of the ETFs. (4:33)Show NotesHomebuilding stalls in cold JanuaryEpisode transcripts: seekingalpha.com/wsb Sign up for our daily newsletter here and for full access to analyst ratings, stock quant scores, dividend grades, subscribe to Seeking Alpha Premium at seekingalpha.com/subscriptions.
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Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis. Good afternoon. Today is Wednesday, February 19th, and I'm your host, Kim Kahn. Our top story so far. Nikola pulls the plug. The EV maker announced that it filed for Chapter 11 bankruptcy protection and also filed a motion seeking authorization to pursue an auction and sale process.
Subject to court approval, Nikola intends to continue certain limited directly provided service and support operations for trucks currently in the field. That includes certain HYLA fueling operations through the end of March. Nikola goes into Chapter 11 with about $47 million in cash on hand to fund the foregoing activities.
Implement the post-petition sale process and exit Chapter 11 through a plan process. Given the company's liquidity profile and the anticipated expense of the cases and limited operations in Chapter 11, the company intends to request authority from the court to consummate a sale of its assets on a timeline that balances the liquidity needs.
CEO Steve Grisky says, like other companies in the electric vehicle industry, we have faced various market and macroeconomic factors that have impacted our ability to operate. In recent months, we have taken numerous actions to raise capital, reduce our liabilities, clean up our balance sheet, and preserve cash to sustain our operations.
Unfortunately, our very best efforts have not been enough to overcome these significant challenges, and the board has determined that Chapter 11 represents the best possible path forward under the circumstances for the company and its stakeholders. Nikola was founded in 2014 by Trevor Milton in Salt Lake City, Utah.
The company set a goal to revolutionize the transportation industry with a focus on zero-emission vehicles. In its early years, Nikola garnered significant investor attention with the unveiling of the first hydrogen-electric semi-truck prototype, the Nikola One, in 2016. Nikola went public on June 4, 2020, through a merger with Vecto IQ Acquisition Corp.
However, the automaker soon faced serious allegations of fraud, leading to investigations by regulatory bodies, and the resignation of Milton as executive chairman. On the economic front, January housing starts dropped 9.8% month-on-month to a $1.366 million annual rate, worse than the $1.39 million consensus and down from $1.515 million in the prior month.
Building permits unexpectedly inched up 0.1% sequentially to an annual rate of $1.483 million compared with the $1.46 million forecast.
Raymond James chief economist Eugenio Alleman says the decline in housing starts is going to put downward pressure on residential investment during the first quarter of the year, and it's in line with our view that economic growth during the year will be weaker than in 2024.
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