(Reuters) - Nikola ( NKLA ) on Thursday announced a 1-for-30 reverse stock split to comply with Nasdaq listing rules.

The stock will begin trading on a split-adjusted basis starting June 25, the company said.

WHY IT'S IMPORTANT

Through a reverse stock split, a company can shore up its stock price by drastically reducing the number of shares outstanding, helping it to avoid being delisted from an exchange.

CONTEXT

Nikola ( NKLA ) missed Wall Street expectations for first-quarter revenue in May as it delivered fewer hydrogen fuel cell trucks. Its cash and cash equivalents at the end of the three-month period ended March 31 stood at $345.6 million, down from $464.7 million in the prior three months.

BY THE NUMBERS

The number of authorized shares will be reduced from 1.6 billion to 1 billion after the split.

The company had 1.36 billion shares outstanding and its market capitalization stood at around $652 million, as of last close.

MARKET REACTION

Nikola's ( NKLA ) shares fell more than 15% to a record low of 40 cents on Thursday, after tumbling about 45% this year, up to last close.

(Reporting by Akash Sriram in Bengaluru; Editing by Anil D'Silva)