Source: Nicola Motor Company
Nicola’s shares rose on Thursday, a day after the company said its production timeline and factory plans were on track amid widespread investor concern about the company’s business as well as a planned deal with General Motors.
The stock rose as much as 31% in the first day, trading up to around 16% recently before 1pm but the jump slightly dips to ease the stock’s recent weakness; The shares have lost 37% in the past month.
Short-selling firm Hindenburg Research accused the company of fraud in a horror report released last month. The findings reportedly stalled the Securities and Exchange Commission as well as the Justice Department’s investigation and eventually led to the founding and former executive chairman Trevor Milton’s exit from the company.
Hindenburg’s claims raised suspicion among investors that Nikola’s pre-announced deal with GM would make a difference.
The deal has not been finalized yet, but it had to be done before this past Wednesday despite initial goals. But according to Nicola CEO Mark Russell, the two companies remain in discussion. The partnership will provide the Detroit automaker with an 11% stake in the company to supply Nikola’s battery and fuel cell technologies, as well as the production of Nikola’s badger pickup.
Also weighing in on potential partnerships are sexual abuse allegations against Milton, reported Monday by CNBC. The two women have come forward with formal allegations against the founder, accusing the 38-year-old billionaire of sexual abuse in complaints filed with Utah officials when both women were 15 years old.
Through a spokeswoman, Milton “strongly denied” what he said were false allegations and refused to address specific details of the women’s complaints. Milton and Nicola have also denied allegations of fraud in the Hindenburg report.
– Michael Wyland of CNBC contributed to the reporting.
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