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Nikola Corporation Investigation | Nikola Motor Company Fraud

Nikola Corporation Investigation | What happened?

Nikola Corporation was founded in 2015 and revealed its first truck, the Nikola One, one year later. It quickly caught the attention of the industry and investors. In a market dominated by Tesla, Nikola’s “zero-emission trucks” seemed very promising. Then, allegations that its founder, Trevor Milton, had been portraying a false image to the public started became worrisome to investors.

“Milton then made several comments to the crowd at the December 2016 event suggesting the Nikola One was driveable. The statements alarmed people familiar with the truck’s capability, who told Bloomberg News recently that it was inoperable and missing key components to power itself. On Wednesday, Milton said key parts were taken out of the vehicle for safety reasons and that it never drove under its own power.

The people familiar with the truck, who asked not to be identified discussing sensitive information, said they were concerned about the statements. Gears and motors were missing, and while the words “H2 Zero Emission Hydrogen Electric” were emblazoned on the vehicle, there was no fuel cell on board.”
(Edward Ludlow, Bloomberg, June 17, 2020)

On September 8, 2020, despite claims of problems involving Nikola, the company announced that GM had taken an 11% stake in the company. According to CNBC, “GM is getting a $2 billion stake in Nikola and the right to nominate one board member in exchange for in-kind services.” As a result, Nikola’s shares “popp[ed] as much as 53%.”

GM, it should be noted, was not the first company taking an interest in Nikola:

“Nikola founder Trevor Milton has pursued broad partnerships to get up and running, with companies including Bosch, commercial vehicle maker Iveco, Meritor, Nel Hydrogen and South Korean solar panel maker Hanwha. Nikola estimates the value of the partnership with GM to be worth $4 billion. The Badger is to be in production by 2022 and will be sold and marketed by Nikola…”
(Alan Ohnsan, Forbes, September 8, 2020)

Two days after the GM announcement, Nikola was back in the news: Hindenburg Research released a report in which it said, “Nikola is an intricate fraud built on dozens of lies over the course of its Founder and Executive Chairman Trevor Milton’s career.” Among the accusations:

• A spokesman for Volvo spin-off Powercell AB, a hydrogen fuel cell technology company that formerly partnered with Nikola, called Nikola’s battery and hydrogen fuel cell claims “hot air”.
• Trevor claimed that Nikola’s headquarters has 3.5 megawatts of solar panels on its roof producing energy. Aerial photos of the roof and later media reports show that the supposed panels don’t exist.
• In a July 2020 podcast, Trevor said of Nikola’s “Tre” truck: “We have five of them coming off the assembly line right now in Ulm Germany.” A spokesperson for Bosch, the manufacturing partner building the trucks, confirmed this month that they haven’t made any trucks yet.

The allegations brought to light by the Hindenburg Research were met with an immediate response from the market. Initially, its share price fell 11%. Then, on Friday (9/11), it plunged more than 15%. Throughout the day, Citron Research backed the report by the Hindenburg Research, which, according to Business Insider, made the shares sink “as much as 18%”.

The securities law firm of Peiffer Wolf Carr Kane & Conway (“Peiffer Wolf”) is currently investigating Nikola Company. If you invested in Nikola, Contact Peiffer Wolf for a FREE CONSULTATION by calling 504-523-2434 of by filling out a Contact Form on this website.

“One massive pillar Nikola has been banking on for future success is the company’s ability to produce or source hydrogen fuel at a cheap price. In the past, Milton claimed Nikola produced its own hydrogen at just $3 a kilogram — an incredible feat. He cited a standardized hydrogen station as the factor that drove the cost down, but according to the report, Nikola did not (and still does not) operate a hydrogen production facility. A standardized station is irrelevant if there isn’t actually any hydrogen at all. Milton admitted this summer the company doesn’t make any hydrogen itself.”
(Sean Szymkowski, Road Show by CNET, September 10, 2020 – based on the Hindenburg Research report)

 

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Did You Invest in Nikola? Nikola Corporation Investigation

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Contact Peiffer Wolf today by filling out a Contact Form on our website or by calling 504-523-2434 to schedule a FREE Case Evaluation.