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Nikola announced Monday that founder Trevor Milton will resign with immediate effect as CEO following allegations by a short seller that the electric truck maker’s business was an “intricate fraud.”
Stephen Girsky, a former vice president of General Motors and a member of Nikola’s board, will assume the presidency.
“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 a statement. “So I made the difficult decision to approach the board and volunteer to step down as CEO.”
In a letter to employees, he said he would be “cheering from the sidelines” and that the company was in “incredible hands.”
Despite stepping down as a director and board member, he remains the largest shareholder in the company, holding 91.6 million shares or a quarter of its shares, valued at about $ 3.3 billion at Friday’s closing price of $ 34.19.
Milton’s decision comes after a tumultuous 10-day period in which Nikola’s shares were cut in half following a report by short seller Hindenburg Research that claimed to have “extensive evidence” that Nikola’s proprietary technology was sold. bought from another company.
The report also raised questions about previous businesses run by Milton, several of which were bogged down by lawsuits or had collapsed.
In a letter to employees announcing his departure, Mr. Milton wrote that he intended to “defend myself against the false accusations made against me by outsiders.”
Mr. Girsky thanked Mr. Milton for his “visionary leadership and significant contributions to Nikola since its founding” and said that Nikola has “world-class partnerships”, including with GM.
In addition to Mr. Girsky, a well-known industry operator, Nikola is also in the hands of former manufacturing executive Mark Russell, who is its CEO.
Several Nikola investors previously told the FT that they were impressed by Russell, whom they saw as a reassuring balance for Milton.
In a note published Sunday before the announcement of Milton’s departure, analyst Jeffrey Osborne of Cowen, the financial services group, said “it will take some time for the team to regain credibility with investors.”
He described Milton as “self-assured, boastful and always in ‘sales mode'” but said the founder was guilty of setting “too aggressive” targets, rather than “intentional deception.”
In the days following the Hindenburg report, the FT independently verified several of the allegations, including the fact that Nikola rolled a truck down a hill for a promotional video.
In a detailed defense filed a week ago, the company also confirmed some aspects of the report, including the use of supplier parts.
On Friday, FT reported that Nikola was using Romeo Power, a California battery group, to supply the batteries for its prototype trucks.
Following the short seller’s allegations, the US Department of Justice investigated the claims, which Nikola has said are “false and misleading.”
