Nikola and General Motors have been the talk of Wall Street lately, with a recent partnership between the two automakers resulting in dramatic shifts in stock prices for the upstart Nikola. Much of the action behind the scenes can be attributed to former General Motors executive Steve Girsky, who retired from GM’s Board of Directors in 2016 after working at GM for seven years.
Per a recent report from Automotive News, Girsky was responsible for a number of Nikola’s headline moves this year. Not only did Girsky help to secure $700 million in funding via a merger with VectoIQ, he also oversaw Nikola’s public listing through a reverse merger. Additionally, the former General Motors executive leveraged his contacts at GM to move the recent partnership deal forward.
Now, however, Nikola’s shares have dropped sharply following a scathing report filed last week that claims Nikola’s founder, Trevor Milton, overstated the company’s tech capabilities. The report, filed by Hindenburd Research and titled “Nikola: How to Parlay An Ocean of Lies Into a Partnership With the Largest Auto OEM in America,” says that the company’s new battery system technology does not exist, and that certain vehicle components Nikola claims as its own actually come from other companies.
In addition to putting a dent in Nikola’s stock, the report has sparked federal investigations and led some critics to claim General Motors failed to properly vet the startup before announcing the recent partnership. Grisky, however, remains steadfast in his analysis of Nikola.
“We showed up with an army of people to due diligence this thing,” Grisky said early last month. “I don’t doubt there are going to be twists and turns here, but I did put my reputation on the line for this deal.”
As the recent Automotive News report points out, Grisky was reportedly the first to bring Nikola to the attention of GM CEO Mary Barra. Barra too has gone on record in saying that Nikola was properly vetted prior to the partnership announcement.
We’ll follow this story as it develops and bring you all the latest. In the meantime, make sure to subscribe to GM Authority for more GM business partnership news, GM business news, and around-the-clock GM news coverage.
Comments
Since the announcement of this deal the following has happened.
1 – Hindenburg called them a Fraud
2 – The SEC is investigating the allegations
3 – The DOJ is looking further into Criminal Intent
4 – A Class Action Lawsuit has been filed by investors
4 – Nikola Stock has fallen
Man I have been saying for a while that I truly believe that Nikola was a Ponzi Scheme all along but when they signed the Deal with GM I figured they got away with it and that GM would absorb the name Nikola in the Future for next to nothing.
But life came fast at Milton and Nikola…..Woooooooow
Mary Barra is foolish to say they have vetted Nikola. She is just completely incompetent and careless.
I don’t know who is a bigger disaster. Trevor Milton or Mary Barra?
There are lots of people with a vested interest who wish the accusations to be true. And they may or may not be. It will be interesting to see what happens when independent body looks at these.
But I have a hard time believing that some short seller was able to get better information than General Motors when doing due diligence on Nikola.
Tesla has been accused of worse by better people and somehow those have never been made this big of a deal. Like I said vested interests.
@Neromanceres
I tend to agree with you and I too am hopeful that GM doesn’t end up looking like they got scammed by a Startup Company. I do however disagree with you about Tesla. Not one single Short Seller has ever said Tesla vehicles are fake and so is their Tech. Lets remember that Tesla went Public after Customers had a vehicle in hand. Totally different then CGI renderings that Nikola is showing off.
Tesla didn’t need an OEM to bail them out as Tesla is completely building all their Product in House.
This does not look good for us in GM. Many red flags on NKLA from the very start. This is going to be as bad as Dieselgate because it makes us look corrupt and stupid. How are we going to compete against a company with higher margins and better tech, when we can’t even figure out what is fake or not? We can’t sweep this under the rug again folks. Our green reputation has been tarnished before. Now our integrity is being sold as well. We need to make some serious changes to our leadership or we won’t be around for long.
I think it is wrong to call Nikola Motors an “automaker” as in the very first sentence which speaks of a “recent partnership between the two automakers”.
To be called an automaker, a company should have produced more than Powerpoint presentations and mockups, at least one real automobile driving autonomously by its own power.
Nikola Motors might be called s “prospective automaker”, but maybe rather suspective or suspected automaker.
Nikola does not have any technology, no working prototype, no factory. If this is what GM calls “due diligence”, then I am selling all my GM stock.
Escatly….Nikola has nothing according to Hindenberg and the facts we all saw. nothing…its so ridiculous…nothing.
I find it hard to believe that GM writes a 2 B dollar deal without doing their DD. The SEC investigation could very well be on analyst fronting for Their Short Selling clients. Should be an interesting Nikola day in December.
My take is both are somewhat true. GM absolutely knows what they bought, they don’t drop that kind of coin without having all the ducks in a row. But my thinking is Nikola has no tech, GM knew it from the start, and to be honest for GM it doesn’t really matter. GM is a long ways along in electric and self driving, they don’t need IP from a startup at this point. They need a way to get this stuff to market, and Nikola provides a way to do that outside of the baggage of the GM brand. So when Barra responds with “We did our due diligence”, to me that reads as ‘Yeah we knew a long time ago they don’t have any tech, but that’s not what we were after.”
So what skin does GM have in this game?
At zero cost GM gets 11% of Nikola + another $700m to assemble a pickup truck body of Nikola’s design on GM’s existing platforms and e-power trains. (GM Defense builds an Army BEV-Fuel Cell Silverado now).
I think it is a big mistake for GM to go along with this NKLA scam. Con men can promise you the world because they never intend to pay up. Siding with a hustler like Milton just makes GM look corrupt.
OMG! This is what happens when you appoint a bureaucrat from purchasing to head GM. She only operates on $$$ – no conscience, no integrity, no critical thinking.
So, Mary Barra’s logic is: She would defend a huckster because GM could get free money from Nikola? Did it never occur to her that her company’s reputation is worth more than $4 billion. The last thing GM needs is another scandal trying to con the green movement – EV1 hasn’t been forgotten yet and still having an impact on BOLT sales.
I don’t know what is worse. Admitting to being dumb for not realize Nikola is a scam or admitting to being immoral and sticking with a snake oil salesman?
GM has never done anything right in the past two decades. It should have been bankrupted if not bailed out by Obama in 2009. Now it’s 2020: They lost all their sedan market, no one buying their compliance cars, and caught swindling green money with Nikola. No more bailout for GM next time.
There is a film on Youtube of a fuel cell truck delivering AB/inbev beer. The haters on here are a little over the top.
If Nikola is a scam, then criticism is not hating but informing the public. I can’t believe you still think Nikola is legit. Milton said his company runs on 100% solar energy from solar panels on their roof. But it turns out, there is not even a single solar panel on their roof. Milton is just using the green movement to scam people.
Your conditional statement does not prove they are a scam. In fact, I saw a lot of haters on GM when they were bailed out, and that has extended here if you see the comments. It is irrational. I could easily say if this is a hit job… so is InBev on cahoots too?
I’m sorry I had to comment. Fuel cells exist. They’ve been used in the space program for years, they just cost 200 grand. The innovative and exciting part of Nikola was how cost effective the technology they touted was, refusing cost per kilowatt to 1/3rd of comparable EVs, developing hydrogen fuel in-house, the list goes on of exciting thing they said they had. Also, General Motors had working fuel cell vehicles in the 1960s. So I believe you when you say you saw one on youtube. Fuel cells existing does not make Nikola any less of a scam. It is without a doubt questionable why GM would agree to so many terms. Some speculate that Nikolas overpriced stock would have allowed GM to fundraise much more easily becuase Nikolas stock compared to GMs is still extraordinarily overvalued even after its price collapse.
I find it hard to believe that GM didn’t know that Nikola is a fraud. It is all over the Internet. Even if GM didn’t do the crime, but if they enabled the criminal to continue the crime, they are just as bad.
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