Here's Why Nikola Shares Are Trading Lower Premarket

EV maker Nikola Corp NKLA founder and former Chair Trevor Milton voted against a proposal to raise capital by issuing new shares, Bloomberg reports.
The veto led to the adjourning of the annual shareholder meeting to June 30 to request more proxies in favor of the proposal.
Milton is Nikola's single largest shareholder, with the power to stop measures if a large chunk of Nikola's primarily retail stockholder base does not vote in favor.
The proposal would increase the number of shares outstanding by 200 million to 800 million, enabling Nikola to sell equity and raise cash at any time in the future.
Therefore, Milton's move could also thwart Nikola's growth prospects by limiting the company's ability to raise capital, especially when it looks to go on a mass production drive with its electric and hydrogen fuel cell trucks.
In July, Milton will face charges of overstating the company's technical capability and prospects. Milton had resigned from Nikola in 2020.
The Department of Justice had subpoenaed Milton as part of an investigation.
Price Action: NKLA shares traded lower by 2.34% at $7.08 in the premarket on the last check Friday.
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