General Motors will continue to discuss potential partnership opportunities with Nikola Corporation after the company was labelled an “intricate fraud,” by a noted shorted-seller for allegedly misleading and lying to investors.
GM has confirmed to Reuters that discussions with Nikola executives remain ongoing as it looks to renegotiate its deal with the electric vehicle maker. It had previously agreed to give Nikola access to its electric and hydrogen vehicle technology and engineer and build the Nikola Badger electric pickup truck in exchange for an 11% stake in the company, however with the report sending Nikola’s stock down more than 30% from the $50.05 high it reached after the announcement, GM may now be looking to get a better deal in exchange for its services.
“Our transaction with Nikola has not closed,” GM spokeswoman Juli Huston-Rough told Reuters this week. “We are continuing our discussions with Nikola and will provide further updates when appropriate or required.”
GM said previously that it expected the Nikola deal to close by September 30th. The deal also included a clause noting that either side could choose to terminate the agreement if it was not finalized by December 3rd.
Investors, analysts and other industry watchers have begun to question how well GM vetted Nikola before deciding to enter a partnership with the company. The short-seller report, penned by Hindenberg Research, pointed out several ways the company had apparently mislead investors and the public, from filing its Nikola One semi-truck rolling down a hill for its promotional video to covering up labels with tape to claim it was making its own inverters. GM’s due diligence was further called into question this week after it was revealed that company founder Trevor Milton had been formally accused of sexual assault by two separate women.
The U.S. Securities and Exchange Commission and U.S. Department of Justice are now said to be investigating Nikola over the claims made in the short-seller report, though neither agency has issued a public statement on the alleged investigations. Milton resigned from his post as executive chairman of the company earlier this month, but retained his 25% stake in Nikola.
GM previously indicated that it wanted to go forth with the Nikola deal – unsurprising given that it has been shopping its Ultium batteries and Hydrotec fuel cell technology around to as many companies as possible as it looks to achieve economies of scale for its new clean vehicle tech. Hindenberg Research remains adamant that the misdeeds outlined in its initial report were only the start of Nikola’s problems, though, saying it is “only the beginning of Nikola’s unraveling.”