Nikola shares ride wild after denial of allegations by short seller, SEC investigation reports


Shares of electric-truck maker Nicola Corp went on a wild ride on Monday, as the Securities and Exchange Commission reportedly weighed fraud claims of a short-seller, which the company had denied earlier in the day.

After sinking about 8% in morning trading, Nikola NKLA shares,
+ 11.39%
After reboots were issued by the company, it grew by more than 11%. But after the Bloomberg News report, which was looking into the claims of short-seller Hindenburg Research, much of that was achieved after hours. Nicola reduced the extended session by 8%.

Last week, Hindenburg called Nicola a “complex fraud”, accusing the company of making false statements and false claims about its technology. On Monday morning, Nicola called the report “inaccurate and misleading” and made a major refutation of Hindenburg’s allegations, citing “dozens” of inaccuracies.

But Nicola did not dispute that in a 2018 promotional video giving the impression of a self-driving truck in action, it is actually seen moving the truck up the slope. “Never had its truck running under its own propulsion in the video,” said Nikola.

Nicola also said that the SEC had “consistently approached and briefed” the Hindenburg report, claiming that it was designed to manipulate the market to benefit short sellers. In a statement, Nicola said it “welcomes the SEC’s involvement in this matter.”

But its stock reversed in extended trading after a late-afternoon report by Bloomberg that the SEC had also looked into Hindenburg’s allegations that Nikola may have violated securities laws by defrauding investors. Bloomberg said the review is preliminary and may not result in an investigation.

Wembush analyst Dan Ives waited on Monday, stating that Nikola is a “prove me” stock while keeping a neutral rating.

Last week, General Motors Co. took over a $ 2 billion equity stake in the company after it acquired more shares in Nicola and announced a “potential game changing” partnership to make electric pickups. GM chief executive Mary Bara told CNBC on Monday that GM had done “due diligence” ahead of the deal.

Nicola’s shares have sunk 47% in the last three months, but still remain around 250% for the year.

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