Shares of Nikola (NKLA) are under pressure on Monday after the electric-truck maker disclosed that its S-1 filing became effective. The company's 24M warrants are now exercisable, giving holders the right to buy the shares for $11.50. This also registers the 53.4M shares owned by private investment in public equity, or "PIPE," investors, enabling them to be traded on the market, Deutsche Bank analyst Emmanuel Rosner explained.

S-1 FILING BECOMES EFFECTIVE: On Friday, Nikola disclosed a filing that will allow for the sale of up to 249.84M shares of common stock by selling shareholders. The filing pertained, in part, to stock warrants that were issued as part of Nikola’s coming public in early June. Nikola went public through a merger with VectoIQ, a special-purpose acquisition company.

REGISTRATION 'NOT NEW OFFERING': Nikola chairman Trevor Milton said via Twitter on Friday night that, "S1 has gone effective finally! All the fear-mongering is insane and it'll be nice having the Pipe investors registered. It'll show who's long and who's not. The fear-mongering can go away finally. It's difficult going IPO and after this, we're full steam ahead...The registration statement has finally been declared effective. Finally. It's been like a weight slowing us down...It's a long-term investment. It's been about a month since we went public. It's the process of a SPAC to have shares register and become effective for those who bought them. It's not a new offering. It's just part of the process... We'll be right back up in my opinion. It's the stock market. Of course, you're going to have good days and bad days. We'll finally be through the worst of it imo."

'LARGE TECHNICAL SELLING PRESSURE': Commenting on Nikola's S-1 filing becoming effective, Deutsche Bank analyst Emmanuel Rosner noted that it not only means the company's 24M warrants are now exercisable, giving holders the right to buy the shares for $11.50 but also registers the 53.4M shares owned by PIPE investors, enabling them to be traded on the market. Rosner believes the potential for a portion of these 77M shares to hit the market through early investors selling could create "large technical selling pressure" on Nikola.
Nonetheless, once the stock eventually stabilizes, the analyst believes this could create a potentially attractive entry point for investors into Nikola, a “rare pure play on zero-emission commercial trucks, whose adoption is poised to take off,” driven by global regulations. Rosner has a Hold rating and $54 price target on Nikola shares.