Nikola Shares Tank

  • By: Ruchi Gupta
  • Date: September 14, 2020
  • Time to read: 2 min.

Nikola Shares Tank Following Short-Seller Firm, Hindenburg Research’s Fraud Allegations 

Nikola Corporation (NASDAQ: NKLA) shares plunged last Friday by over 14% after the company fired back against fraud allegations report by Hindenburg Research.  The electric vehicle company has denied the allegations of being an “intricate fraud” and considers possible legal action.

Hindenburg Research accuses Nikola of fraud.

The company has retained Kirkland and Ellis’s services for potential legal response and indicated that it would bring documents to SEC to refute the allegation. Kim Brady, the CFO of Nikola, told Cowen and Co industry conference that they are planning a response this week.

In a statement, Nikola said on Friday that a report from the short-selling firm Hindenburg Research was after manipulating the market to profit from Nikola stock’s manufactured decline. Nikola further stated that Hindenburg published a report full of salacious accusations and misleading information directed at Nikola’s executive chairman and founder Trevor Milton. The company stressed that whatever Hindenburg Research released was not a research report because none was accurate but rather a hit job for short selling profit-motivated by greed.   

Nikola CEO made false statements to score partnerships with automakers.

Hindenburg accused Milton of making false statements regarding the company’s technology to score partnerships with leading automakers. The research firm stated that it had evidence that included phone call recording and text messages carrying false statements. Nikola stages a video demonstrating a truck that seemed to be functional. Hindenburg said that the truck was, however, towed downhill on a remote road and then recorded.

Among other allegations labelled against Milton include his announcement last year that Nikola was working on a breakthrough battery system that doesn’t exist. The company also claims to have designed some tech and electric vehicle components bought from other manufactures and presented them as their own. Nate Anderson, a CFA who wrote the report, stated that they have never witnessed such a level of dishonesty from a public company.

The allegations come days after Nikola General Motors (NYSE: GM) indicated that it would take an 11% interest in Nikola, which will produce the marquee hydrogen fuel cell electric truck the Badger by 2022.  In a statement, GM said that they were confident that working together will create massive value. GM affirmed that they were standing by their statement when they announced the relationship with Nikola.


Previous Post

DUP planning to present amendments to the Withdrawal Agreement

Next Post

Nvidia To Acquire UK Chip Designer

Nvidia To Acquire UK Chip Designer