Nikola Shares Slide Following Claims That Founder Overstated Tech Capabilities
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Nikola Motor Company shares fell today following claims that company founder, Trevor Milton, overstated the start-up’s tech capabilities.
Per a recent post from Forbes, Nikola Motor Company was lambasted in a lengthy report from Hindenburg Research and CFA Nate Anderson. The report, titled “Nikola: How to Parlay An Ocean of Lies Into a Partnership With the Largest Auto OEM in America,” claims that the company’s new battery system technology doesn’t actually exist, and that some vehicle components Nikola claims as its own were in fact purchased from other companies.
“We have never seen this level of deception at a public company, especially of this size,” Anderson said.
Nikola shares fell Thursday morning, currently trading at $37.57 as of this writing.
In response, Nikola company founder Trevor Milton called the report “lies,” tweeting, “Tens of millions of shares shorted the last day or two to slam our stock and hit job by hindenburg.”
It makes sense. Tens of millions of shares shorted the last day or two to slam our stock and hit job by hindenburg. I guess everything is fair game in war, even a hit job. I know who funded it now. Give me a few hours to put together responses to their lies. This is all you got?
— Trevor Milton (@nikolatrevor) September 10, 2020
The Hindenburg report arrives just days after it was announced that Nikola Motor Company was engaged in a new strategic partnership with General Motors, with GM engineering, validating, homologating, and building the new Nikola badger electric pickup truck, as well as supplying the start-up with its Hydrotec fuel cells and Utilium batteries. In exchange, Nikola has provided General Motors with a $2 billion equity stake.
The partnership announcement sent Nikola shares soaring 41 percent for the day.
The partnership will help Nikola to gets its semi trucks on the road more quickly, rivaling competing products from Tesla in the race to commercialize electric vehicle trucking. Nikola has previously stated that it is developing its own “breakthrough” battery chemistry, and the new partnership with General Motors is framed as a near-term solution to get its vehicles on the road more quickly.
As stated in the recent Forbes piece, Nikola currently has 14,000 orders for its emissions-free semi trucks, primarily from the Anheuser-Busch brewing company.
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Doesn’t really affect GM other than the short term share shock. If Nikola doesn’t have their own viable battery tech GM can continue supplying them with Ultium cells and continue to profit all while getting more road testing real world miles on their battery.
In fact if Nikola doesn’t have a battery, or even hydrogen cell, to put into production GM has both and could flex that into further ownership control and board seats.
so you are saying gm owns 11% of nothing.
Yeah, but GM also paid nothing for it, not a single cent.
if it turns out that gm was conned by this ponzi scheme, it makes them look incredibly stupid, desperate and inept even if it doesn’t cost them a cent.
There’s no way in hell that GM didn’t have any idea about this. Come on, Tesla fanbois from all over the internet have been endlessly yelling and screaming about this for months. Look on any EV news website with a story on Nikola, and check the comments. This has been endlessly discussed by Joe Bloes all over for years.
Yes, GM knew about it.
I said this before, and I’ll say it again: GM didn’t make this move to try to seem all hip and forward-thinking by being associated with a mini Tesla brand. They knew Trevor Milton was up to crap, that he was going to be bounced, and they’d have immense power gains in the company nearly overnight. All for not putting down a single cent. You think it’s a coincidence that this story dropped 2 days after the deal?? Badger likely will never be built…what GM wanted were those EV/hydrogen semi trucks, and the image Nikola provides for them. And they may just get them, too.
GM will have majority ownership in a highly-profitable Nikola in the near future, and the brand will be dedicated to commercial electric vehicle design and manufacturing. This is going to be a HUGELY profitable segment in the near future. Mark my words…this was all planned.
G8B,
GM doesn’t have majority ownership, it will have 10%. “A highly profitable Nikola in the near future”.
Tesla isn’t even profitable after 17 years in operation. The only small profit they have shown was due entirely to electric car credits which won’t have any value once all brands have EV’s in the next 1.5 years.
You seem to believe that you actually know what you’re talking about when all you’re doing is making assumptions.
Bert,
I’m well aware that GM doesn’t have majority ownership. It’s 11%, not 10. You would be served well learning how to read and comprehend before you comment.
“GM will have majority ownership in a highly-profitable Nikola in the near future” – did you catch that? Did I say “will,” or “has?” Did I say “now,” or “near future?” They’re different words and phrases because they have entirely different meanings.
And of course it’s speculation, any first grader could have told you that. I didn’t think I needed a 10,000 word public disclaimer any time I made a comment on a car enthusiast website.
GB Burnout: I agree with all you said, except about that GM was going to “bounce” Milton in a back-handed way. Trev said (during the summer) that he’d be stepping down in a year, to go do other “stuff”. I remember when he said it in an interview and was kind of sad and puzzled by it….but figured the “BIG BOYS” would be taking over as planned. (With Treveor in on the “plan”) Especially since Mark Russell had been installed in his position, since the VTIQ/pre-market days. I think the only reason Trev stepped down sooner were the “sexual allegations” (parathesis added because I’m thinking they are pretty bogus…though still damaging to NKLA’s image). Anyway…I do hope that NKLA will be HUGELY profitable, since I am an early investor…(still in the green…but nervous!!!)
A lot of us got thumbs down the other day when we said that we would rather work with Rivian because things don’t seem quite right with Nikola. Now this…..
Why bother? Some of the people here will agree with anything GM does or try their best to put a positive spin on it. I suggested that GM update their vans and become more competitive in a segment that Ford dominates and I got thumbs down.
Nikola is a Ponzi Scheme I am convinced of it. I have been saying this for months now.
Pump and dump 100%
The Board will cash out early 2022 and walk away Super rich and GM will at least get the Name to Nikola for a Bag or Rocks.
why would you want a brand that is a ponzi scheme?
@Steve
As crazy as it sounds you do not care about the Company of Nikola if you are GM as they are vaporware but you just want the rights to the name Nikola.
Only investors will realize that the Company is fraudulent. The majority of the public will just think it is a so called new Tesla competitor. If you are GM you only care about potentially getting the name.
But I knew it all along that Nikola was full of you know what.
i don’t see a lot people lining up to use the name “theranos” even in the middle of a pandemic.
@Steve
Theranos was a Private Company in the medical field that was shut down. What does that have anything to do with a Car Company Name?
How many people know Medical Lab company names exactly?
because theranos was a fraud just like, according to you, nikola.
but at one point, they had an army of believers too so according to your logic, that name is valuable.
i agree most people don’t know anything about a medical testing company but you think they know/care what semi long haul trucking companies use?
I think you are missing that Millennials associate Nikola name with Tesla. GM only wants that.
if at the end of this mess, gm’s 11% stake of this sham company puts them in a better position to claim the “nikola” name for little money, then that makes sense.
but if it is going to cost them billions, i think that is pets.com crazy.
Maybe the plan all along is to change the GM name to Nikola as they transition to full electric.
That would be a slick move.
Do they? I didn’t, am I’m even not yet 100. Bu OK, Nicola Tesla spent most of his adult life in North America.
Originally I only knew of the physical unit Tesla:
»The tesla (symbol: T) is a derived unit of the magnetic induction (also, magnetic flux density) in the International System of Units.« (wikipedia)
The person behind it slipped into my mind with Elon Musk’s automobile venture and only after being confronted here with GM’s relationship I looked up more information about this person Nikola Tesla, born under the hungaro-austrisn monarchy in what belongs today to Croatia, in the Serb settlement area along the border to Bosna-Hercek
While Nikola may have stretched the truth about the technology the company was capable of, General Motors must have seen everything and agreed to the partnership as it gives GM the ability to test much of the technology planned for future EVs like the upcoming Cadillac Lyriq CUV EV.
Update: Nikola blasted as false and misleading
I have been telling everyone that Nikola is a Ponzi Scheme. Classic Pump and Dump
Whatever GM saw from Nikola when they laid out the agreement, must have been impressive enough to justify doing it in the first place. I doubt GM signed on the line over a Power Point of promises and hopes of things to come. Nikola must have something that GM didn’t have or couldn’t get with out them or they certainly would have.
GM didn’t spend s single cent and have, I hope, not accepted any financial liabilities.
They have only agreed to develop a real car out of the Dodger concept, and to produce it in one of their factories with GM technology.
BTW, I snapped up something of in-wheel hub motors in the Nikola concepts. Does that company have developed something on their own or do they have selected a supplier, like Lordstown Motors?
This CEO looking at Elon musk and scratching his head
it’s the brand name and the currently associated branding …. mots probably nothing more and nothing less
Fake it until you make it. That’s exactly what Tesla did. They were on the verge of bankruptcy for nearly 15 years of their now 17 years of existence.
@Bert
Exactly.
Was it a year or so ago when we saw the infamous tweet about taking Tesla private “Funding secured at $420.00 per share” ( or close to that) ?
Elon should be in prison for that and anyone else would be.