Nikola Accused Of Fraud Days After GM's $2 Billion Investment

Industry News / Comments

A report issued late last week is quite troubling.

Nikola appeared to be on a roll over the past couple of months but now everything is being called into question. In June, Nikola went public with a $26.3 billion evaluation and just last week announced a major investment and partnership with General Motors. America's largest automaker will engineer, homologate, validate, and later build the Tesla Cybertruck-rivaling Nikola Badger battery-electric and hydrogen fuel-cell pickup truck. Things were looking good until last Thursday, the day a report from financial firm Hindenburg Research was released.

Hindenburg, it must be noted, holds a short position in Nikola stock, meaning if Nikola shares fall, Hindenburg profits. But Hindenburg's allegations are quite troubling. In its report, it claims to have gathered evidence that company founder and Executive Chairman, Trevor Milton, purposely engaged in deceptive tactics in order to manipulate public opinion of Nikola.

Nikola
Nikola
Nikola
https://twitter.com/nikolatrevor/status/1304049295105032199
Fastest German Cars Ever Made
Fastest German Cars Ever Made
Most Insane Nissan GT-R Powered Cars
Most Insane Nissan GT-R Powered Cars

The report detailed "dozens of lies" about the company's capabilities, partnerships, and even its products. What about evidence for all of this? Hindenburg examined Nikola's internal emails, analyzed photos, and even sourced an investigator who claims the January 2018 video demonstration of Nikola's semi-truck "in motion" was nothing more than a non-working prototype rolling down a hill after being towed to the top. The video was then edited to make it appear the road was flat.

Again, these are all allegations that Nikola quickly refuted. Milton immediately called the report nothing but a "hit job" against Nikola stock, which has since dropped 24 percent. The company has since retained outside counsel to handle these allegations and to be in contact with the Securities and Exchange Commission (SEC).

Nikola/Facebook
Nikola/Facebook
Nikola/Facebook
Nikola

A rebuttal from Nikola is expected very soon. But what was GM's response to these allegations? After all, it just received an 11 percent stake in the company worth $2 billion, along with $80 million of EV credits, and another $700 million in expense reimbursements. So far, GM has said next to nothing.

Basically, Hindenburg's main claims against Nikola is its inability to make good on its in-house developed technologies, such as inverters. Instead, it relies on off-the-shelf products from other manufacturers it tries to pass off as its own. It also questions the number of reservations it's taken so far for the Nikola Badger. Clearly, these are serious allegations and it's now up to Nikola, or rather its lawyers, to properly refute them.

Nikola
Nikola/Facebook
Nikola

Join The Discussion