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On Tuesday, the rise continued on Wall Street. Two of the three key indices dragged the market higher, and once again it was tek stocks that had the best trading day.
Here’s what it looks like at closing time on Wall Street:
- The Dow Jones Industrial Average closed flat.
- The Nasdaq Technology Index rose 1.21 percent.
- The broad S&P 500 index was up 0.52 percent.
Nikola finished the day down 8.35 percent.
It came after it emerged that the US Department of Justice opened an investigation into allegations of fraud against Nikola, following a report published by a short seller of Nikola’s stock last week, according to the British newspaper Financial Times.
Tesla finished up 7.18 percent on Tuesday, while Microsoft, Amazon and Facebook were up 1.2 to 2.4 percent.
Apple shares fluctuated widely in the hours leading up to the close, and were in a red spot. However, the result was a cautious 0.16 percent increase during the day, after the tech giant held its annual fall conference on Tuesday night Norwegian time.
Fraud accusations
It was last week that Hindenburg Research, which incidentally is short on Nikola, released a report claiming that Nikola is a scam, and that the company’s management has exaggerated descriptions of its test trucks, to get investors to board. The company will produce emission-free vehicles.
“We have gathered extensive evidence, including recordings of phone conversations, text messages, private emails and photographs, showing dozens of false statements by Nikola founder Trevor Milton. We have never seen cheating on this level in a public company. on the stock market, especially of this size, ”Hindenburg wrote in the report.
The US Department of Justice has brought together several representatives to discuss the company and the allegations, according to FT, which refers to sources with knowledge of the case. The New York Attorney General has also taken an interest in the case.
Neither party responded to the newspaper’s questions Tuesday night.
Jacob Kahn, a partner at the law firm Riley Safer Holmes & Cancila, emphasizes to FT that the investigations should not mean it is serious.
– It means that there is smoke and there may be fire somewhere. But that means there is enough smoke to warrant an investigation, he tells the newspaper.
Has struck back
Nikola has consistently denied doing anything illegal and has repeatedly retaliated against the accusations. On Monday, the company provided a detailed response to the report, and CEO Trevor Milton also asked the SEC to follow up on the allegations, as Nikola believes they are false and an attempt to manipulate the company’s share price to that Hindenburg can make money from the short position.
Nikola’s shares rose nearly 300 percent between May and early September, but since last week’s report they fell just over 30 percent. Half an hour before closing time on Wall Street on Tuesday, the share is down nearly eight percent.
The company’s share price reached a preliminary peak in early September, when it became clear that General Motors had acquired an 11 percent stake in the company. That deal also means GM will build the “Badger” pickup, in addition to acting as a battery supplier.
Electric vans
Nikola, which will produce emission-free vehicles, is based in the US state of Arizona and can be seen as a competitor to Tesla. However, Nikola has leaned more towards trucks.
However, Nikola’s “Badger” can be seen as a direct competitor to Tesla’s “Cybertruck.”
In March of this year, the company merged with VectoIQ, in a kind of “reverse acquisition,” which led to Nikola listing on the Nasdaq index in early June.
A “reverse acquisition” is when a company is acquired or merged with another, which then usually trades on the stock exchange from before. This way, you don’t have to go through the whole process that is common when a company goes public.
Nikola is a major partner of the Norwegian hydrogen company Nel, which also has an ownership stake in the company.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content may only be done with written permission or as permitted by law. For more terms, see here.
