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Nikola Corp., the electric vehicle startup that recently partnered with General Motors Co. said its founder resigned as CEO, just days after US regulators reported that the company was the focus of investigations following a highly critical short-selling report.
Trevor Milton, the social media savvy public face of the startup he founded in 2014, has been replaced by board member Stephen Girsky, whose role will be chairman, Nikola said in a statement Sunday night. Shares of Phoenix-based Nikola plummeted 22% in pre-market trading in the US.
Nikola has found himself in the crosshairs of short seller Hindenburg Research, who said on September 10 that Nikola misled investors about his trading prospects, claims that are now up for debate. investigations by the U.S. Securities and Exchange Commission and, reportedly, the Department of Justice. On Sunday night, Milton said he planned to defend himself against “false accusations” in a statement issued through Twitter.
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OBSERVE: Milton resigned as president days after Nikola was reported to be under investigation by US regulators.
“Nikola is really in my blood and always will be, and the focus should be on the company and its mission to change the world, not on me,” Milton said in Nikola’s statement. “So I made the difficult decision to approach the board and step aside.”
Nikola has faced a turbulent period in the wake of a short-lived stock rally after GM Surprise decision earlier this month to take a $ 2 billion stake and build its new truck. The Detroit-based automaker secured an 11% cashless equity position in its smaller partner in a bid to expand and accelerate its own vehicle electrification efforts.
Ups and downs
Nikola’s investors have endured a lot in the company’s short time as a listed entity
Source: Bloomberg
Girsky, 58, is a former GM vice president who helped bring the automaker out of bankruptcy.
Former GM Moonlights executive as matchmaker in a deal with startup Nikola
Short seller ‘Hit’
Nikola’s shares have soared since the company went public on June 4 in a reverse merger with Girsky’s blank checking company VectoIQ. At one point, they skyrocketed so much that the startup’s market value exceeded Ford Motor Co. After the third day of operations, Milton, who owns 35% of the company, according to regulatory filings – it was worth $ 9 billion, making him the 188th richest person in the world, according to the Bloomberg Billionaires Index. His net worth was valued at $ 4 billion before Monday’s stock crash.
the Shares tumbled after Hindenburg Research questioned the validity of Nikola’s claims about its electric vehicle technology, accusing Nikola of being “an intricate fraud built on dozens of lies”. That got the attention of financial regulators.
Milton responded, calling the Hindenburg report a “successful job” in a tweet. He promised in a subsequent cheep to provide a detailed answer to what it said were “one-sided false claims.” He also posted videos on Instagram, including one loaded with expletives, dismissing Hindenburg’s allegations.
While Nikola officially Delayed September 14, some of the company’s responses were more counterarguments than rebuttals.
The short seller’s allegations aren’t the first time questions about Nikola have been raised. In June, Bloomberg reported that Milton it exaggerated the capabilities of the company’s debut pickup, Nikola One, supposedly a fuel cell vehicle that it never produced or brought to market. The company has denied any misleading statements.
Confusing message
Milton, like Tesla Inc. CEO Elon Musk has relied on social media to promote his company. In February, he introduced the Badger truck through a cheep, calling it “the most advanced hydrogen and electric pickup, designed to bring down the Ford Raptor.” June 8 tweeted that Nikola would start booking Badger later in the month for “the baddest truck: zero emissions.” Potential buyers He paid deposits of up to $ 5,000, without even seeing a prototype of a vehicle that won’t go on sale until 2022.
Investors have sometimes had trouble keeping up with Milton’s messages, especially given the evolving list of projects Nikola is undertaking: large battery-electric rigs in Europe, fuel cell semis in the US. ., An electric pickup truck to be built by GM on Pre-eminent supplier of hydrogen to vehicle fleets and vague proposals to enter the high-performance sports car market.
“It’s a bit confusing trying to follow Trevor on his various social media about the timing and cadence of communication for the different variables he’s talking about,” Jeff Osborne, an analyst at Cowen & Co., told the executives during Nikola’s first earnings call on August 4.
Nikola has had a co-development agreement with Germany Robert Bosch GmbH since 2017 to develop key components such as fuel cells, engines and battery packs. He plans to build a battery-electric semi-trailer with CNH Industrial NV’s Iveco at a facility in Ulm, Germany, late next year. A fuel cell semi-trailer is planned for 2023 to be built at Nikola’s factory in Coolidge, Arizona. GM will provide the fuel cells and battery packs.
(Updates of the first US operations in the second paragraph.)
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