Nikola needs votes. The stock rises as the meeting in support of Garner is postponed.

The startup, which makes trucks powered by batteries and hydrogen fuel cells, needs time to drum up more shareholder support for Proposition 2, a key component of its annual proxy statement that will allow Nikola to issue more shares — a necessary precursor to raising more capital. It’s hard to see why shareholders hesitate to vote, or vote no. The proposal is designed to help the company.

“Without additional shares, our ability to raise the capital we need to advance our mission will be elusive,” CEO Michael Loescheler said in a May video to shareholders. “Not to vote for Proposition 2 is the same as against Proposition.”

In the first quarter, Nikola produced 63 battery-powered trucks, delivering 31 to dealers. Retail sales came in at 33 units.

Nicola will eventually need more capital to build her business. Nikola finished the first quarter with about $200 million in cash on its books and access to about $800 million in equity, including its cash balances. Wall Street expects the company to use about $150 million in the quarter and doesn’t expect positive free cash flow until 2027.

Most of the time, issuing more shares is not a problem for companies. Hitting a ceiling related to a company’s bylaws is somewhat unusual. What’s more, the actual number of shares a company owns isn’t usually something investors worry about. The number is just a placeholder for accounting. Nikola has about 720 million shares outstanding. This is not the number investors are interested in. They are interested in a market capitalization of $445 million which is the number of shares times the share price of 62 cents.

To be sure, shareholders seem to see the wisdom in approving Proposal 2. Nikola says the majority of 77% of shares that have voted so far support it. But there are not enough yes’s in the 77% to reach 50% of the total shares outstanding. So Nikola needs to order more unless the rules change.

“There’s a proposal still pending in Delaware that would lower this limit from majority shareholder to majority shareholder or voting shareholder,” says Jonathan Rowe, an analyst with Battle Road Research, which rates the sale of Nikola shares.

While the impact on the company in the long run should be small, the uncertainty around Proposition 2 adds some uncertainty for Nikola investors.

Nikola investors have other things to worry about.

During Wednesday’s trading, shares are down nearly 90% in the past 12 months. Rising interest rates and dwindling cash balances have sapped investor enthusiasm for the stocks of many startups.

Shares rose 6.3% Thursday to 63 cents, while shares edged higher

Standard & Poor’s 500

And

NASDAQ Composite

They were high by about 0.4% and 0.9%, respectively.

Nikola shares had a great day Wednesday as well, up 9.5%. The value created on Wednesday is around $36 million.

There wasn’t much news to pin the gains on. Nikola presented at the JPMorgan investor conference on Wednesday. That may be part of the reason, but stocks have been volatile lately.

Write to Al Root at [email protected]