Short seller Hindenburg Research has doubled over allegations last week that Nicola Motor Company (NKLA) calls the “ocean of lies”, calling the electric-truck startup’s response “a tacit admission of securities fraud.”
In a statement published on Tuesday, Hindenburg dismissed the reaction to Nicola’s claims, saying they failed to dispel doubts about a misleading video that made it appear as if the Nikola One semi-truck was Traveling at high speed under the power of self.
The short seller criticized the company for answering just 10 out of 53 questions, stating that the company should respond for shareholders.
“In Monday’s response, the company admitted that its vehicle was not operating under its own power, and instead, was apparently demonstrating the power of gravity,” Hindenburg wrote.
‘Beyond common knowledge’
The company’s explanation that the truck was only “in motion” in the video, Hindenburg wrote, is “beyond common knowledge.” The short seller indicated additional representations by Nikola in the video’s description that his Nikola One semi-truck had 1,000 horsepower, and zero-emissions.
“Apparently, a truck cannot even have 1 horsepower or 1 horsepower if it does not power itself,” Hindenburg wrote. Hindenburg also stated responses to the company’s verified Facebook account, stating that the Nikola One has “over 1,000 HP” and lbs of over 2,000 feet. Can handle “torque” and “7% grade, no problem”.
“The Fox-based company admitted in a statement after Hindenburg’s initial report that the truck was titled Nikola,” said Nikola, noting that Nikola never stated that his truck was driving under propulsion in the video itself, although the truck had to do so Was designed for “An electric semi truck in motion” was not running on its own power, and was rolling up a hill instead.
In his response, Nikola referenced another recent 2019 video stating that it is driving the next generation model “Two” semi truck on its own power.
In its statement published on Monday, Nicola also stated that investors who had invested during the period of the Nikola One video released in 2017 before the company went public, knew the technical potential of the Nikola One at the time of their investment.
However, the spokesperson did not clarify whether at the time of the Nikola One in Motion video, all investors were made aware of Nicola One’s technical capabilities by Nikola.
Asked if all of Nicola’s investors were aware of the technical capabilities at the time, a Nikola spokesperson focused on his initial partner Bosch, telling Yahoo Finance in an email that Bosch was Nikola’s main partner at the time Was, and was a board member, investor and partner in Nicola’s technology.
“All our investors knew about growth and progress with Nicola Two and how to learn from it. [Nikola] One did that, ”the spokesperson said.
“At the time, the technical capability was an incredibly successful proof of concept with Nicola One,” the spokesperson said. He said, ‘We pivoted to Nikola Two, but everything we learned from Nicola One affects the successful development of next gen trucks. Bosch knows every detail of our trucks and continues today as our partner in our truck development. ”
Yahoo Finance reached out to Nicola to request a response to Hindenburg’s latest allegations and was assured that the company would issue a response.
Based on Hindenburg’s initial claims, Nicola stated that the company’s legal counsel contacted the US Securities and Exchange Commission (SEC) and intended to fully cooperate with the SEC regarding its investigation into the case.
“Nicola has welcomed the SEC’s involvement in the case,” the company said.
According to Bloomberg, the SEC has officially investigated the case.
Alexis Keenan is a legal reporter for Yahoo Finance and former trial lawyer.
Follow Alexis Keenan on Twitter @alexiskweed.