Short seller accused GM-backed Nikola Motors of ‘complex fraud’


According to new allegations from short-seller Hindenburg Research, Nicola Corp made its way into a partnership with General Motors Company to manufacture its Badger pickup truck.

Hindenburg wrote in a report released on Thursday, citing phone calls, text messages, emails and photographs, “We believe that Nicola is a fraud perpetrated on the lies of dozens of the careers of his founder and executive chairman Trevor Milton.”

Startups like Nicola, who rejected Hindenburg’s claims, are more vulnerable to short-sellers because they lack the long track record on which investors can decide.

The sharp rise in the company’s shares after the announcement of the GM deal may have widened the potential profits from bets that the shares would fall.

“We never saw this level of deception in a public company, especially this size,” Hindenburg said.

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Short-sellers often publish negative claims about a company in order to reduce their share price and increase their profits. Hindenberg said that after doing “extensive research” he acquired a small place in Nicola.

Shares of the Phoenix-based electric truck manufacturer declined 13% after the report was released, before slightly reducing their losses.

The anchor Security The last Change Change %
NKLA Nikola Corporation 37.25 -5.12 -12.08%
GM Mango Motors Company 30.43 -1.52 -4.76%

Nicole founder Milton called the report a “hit job” and said it was for “slam” shares of the company that raised its market capitalization to $ 16.06 billion on Wednesday, up from $ 340.86 million on June 3 . The day of his Nasdaq debut.

A spokesperson for the company said in a statement, “Nicola has been vetoed by some of the world’s most trusted companies and investors. We are on track to succeed and not attempt to manipulate our stock based on a report full of misleading information.” will do.” . ”

Hindenburg, meanwhile, attributes the increase in Nicola’s market value to misleading partners about Milton’s proprietary technology.

Nicola announced last year that it would revolutionize the industry with an acquisition that would help produce a battery cell less than half the weight and cost of lithium-ion batteries used by competitors.

According to Nicola, it was realized that the technology was still a concept and according to Hindenburg, the deal was realized after the company president was charged with using NASA’s expense account to hire prostitutes.

Hindenburg stated that Nicola never withdrew his claims and that Milton continued to promote the technique instead. Milton has made several other claims about his technologies that Hindenburg’s claims are false.

Now, Nicola will use General Motors’ battery technology as part of the agreement reached on Tuesday. The arrangement said GM would receive $ 2 billion, or 11%, of the newly issued stock to help build the battery-electric and fuel cell-electric models of Nikola’s badger pickup truck.

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“We are confident of the value we will create by working together,” a GM spokesperson said in a statement. “We stand by the statements made when announcing the relationship.”

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