Nikola Corp (NASDAQ:NKLA) shareholders are in for a wild ride. Despite the company's 6% surge following the approval of a controversial reverse stock split on Wednesday, it faces exclusion from the Russell 3000 Index, a major blow to investor visibility and interest.

Shareholders Approve Nikola Stock Split

On Wednesday, Nikola announced that shareholders approved all proposals at the Annual Meeting, including the much-debated stock split.

This move aims to stave off potential delisting from Nasdaq, enhancing the stock's marketability and addressing financial concerns.

Nikola Chairman Steve Shindler emphasized the importance of maintaining a share price that aligns with Russell 3000 companies to attract broader investor interest.

Also Read: Nikola's Stock Hits All-Time Low: What's Going On?

Removal From The Russell 3000 Index Looms

However, the company's removal from the Russell 3000 Index, as per FTSE Russell's preliminary list, casts a shadow over this victory.

The Russell 3000 Index, a key benchmark, measures the performance of the 3,000 largest publicly traded U.S. companies by market capitalization.

Inclusion in this index significantly boosts a company's visibility and can attract mutual funds and ETFs.

Recent Performance and Financials

Nikola's stock was down 3.5% at 52 cents at the time of publication Thursday, reflecting investor uncertainty.

The company's Q1 financial results revealed a decline in total revenues and a non-GAAP net loss per share of 9 cents. Nikola produced 43 trucks in Q1, with 40 shipped, and recently secured an order for 100 hydrogen fuel cell electric vehicles from AiLO Logistics, slated for delivery in 2025.

As Nikola navigates these turbulent waters, the approval of the stock split may provide some stability, but the removal from the Russell 3000 Index presents a significant challenge.

Investors will be watching closely as the company strives to realign its strategies and secure its place in the competitive EV market.

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