Nikola Stock Tumbles Again As CEO Responds To Salacious Allegations6
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.”
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Salacious allegations are probably more like the truth. Ponzi scheme and vaporware looking for a hand out.
Yeah Nikola likely approached GM and begged for a partnership to help legitimize the brand. The only real value they have (as far as GM is concerned) was a contract to build thousands of EV semi trucks for major American companies.
By making themselves dependent on GM for chassis and EV tech, Nikola basically gave away their future to General Motors for free. I complain about GM leadership a lot, but this is actually be a good medium/long term play. This is a very 1990s Microsoft thing to do.
To anyone that wanted to see Nikola survive: General Motors doesn’t preserve brands like that. They acquire them when they are cheap (free in this case), raid them, integrate the salvageable IP throughout their product offering, starve them until they can no longer function on their own, and then move on.
Nikola will not exist in 5 years, but General Motors will be designing, building, and servicing electric semi trucks for Nikola’s clients….and will be at least a mild pain in Elon Musk’s ass in the process.
logic would tell you the report is true. Nikola had claimed they have hydrogen and battery breakthroughs for years, then recently signs a deal with GM to use GM hydrogen and batteries. So what has Nikola been doing for years.
The funnier part to me is this article says GM will be building the Nikola Badger, a truck that was obviously designed by someone sitting in front of a Ford Fseries and Ram Rebel.
I think that a lot of these tech startups are ponzi schemes- including the ones involved in self-driving sectors. The goal is to rake in investor dollars and get rich before going belly up.
So this was a partnership with a “industry disrupter” of an EV company that will have to use GM’s EV technology and parts bin to fulfill heavy duty commercial truck orders.
Aside from the fact that Nikola should not have been in a position to needing access to GM technology….I can see a benefit here for General Motors. The deal costs them nothing, and they get a contract for thousands of electric semi trucks to help kick start their new Electric HD Truck segment.
Basically they have built in demand for something relatively high risk they can actually deliver.
As far as the Badger….it’s probably dead unless Nikola can hype up their brand a bit more. GM is only interested building and selling semi trucks with Nikola. They needed the orders for such a vehicle.