Shares in Nikola Corporation tumbled once again in Friday trading after a report published by Hindenberg Research accused the electric truck startup of being an “intricate fraud.”
Hindenberg, which holds a short position on Nikola stock, claims company founder Trevor Milton vastly overstated the start-up’s tech capabilities. One of the more damning accusations in the report was that Milton lied about the company’s electric semi-truck prototype, the Nikola One, being able to move under its own power while on stage during the vehicle’s debut presentation. It also claimed that Nikola doubled down on this lie in its promotional video entitled “Nikola One in Motion” which showed the truck driving down a road under its own power. This video, Hindenberg says, was a ruse – the truck was actually pushed to the top of a hill and was filmed as it rolled down the gradient in the road.
Now Milton has hit back at Hindenberg’s allegations, saying the company has “nothing to hide.” Milton also said that Hindenberg’s report has “already taken up more time and attention,” than necessary and indicated his company will be contact with the SEC as it weighs up some sort of legal recourse. In an emailed statement sent to Barron’s this week, a Nikola spokesperson said the company has already been “vetted by some of the world’s most credible companies and investors,” and reiterated its stance that Hindenberg’s claims are without merit.
“We are on a path to success and will not waver based on a report filled with misleading information attempting to manipulate our stock,” the company said.
Citron Research, a financial research firm lead by active short-seller Andrew Left, appeared to back up Hindenberg’s report in a tweet sent out Friday.
“Congrats to Hindenburg for exposing what appears to be a total fraud with $NKLA,” the tweet said. “Citron will cover half of all legal expenses. You can’t SLAPP the truth away. Explains why Milton sold at $10 this June. $NKLA response warrants an SEC investigation to maintain (the integrity) of (the EV market).”
GM announced it had formed a partnership with Nikola earlier this week. Under the agreement, GM will receive an 11% stake in the company in exchange for giving it access to its Ultium battery tech and hydrogen fuel cell technology. The deal will also see GM engineer and build the company’s proposed Badger electric pickup truck, with Nikola only responsible for the sales and marketing of the vehicle.
The Detroit-based automaker did not seem phased by the allegations levied against Nikola in a statement sent to Electrek on Thursday.
“We are fully confident in the value we will create by working together,” a GM spokesperson said. “We stand by the statements we made in announcing the relationship.”