Saturday, 24 Oct 2020

Nikola founder steps aside amid allegations of fraud

Illustration: Lazaro Gamio/Axios

Nikola announced Monday that executive chairman Trevor Milton, who is also the company's founder, is out as the electric and fuel cell truck startup reportedly faces federal inquiries into a short-seller's allegations of inaccurate or misleading statements.

Why it matters: It's the latest move in a head-spinning series of events for Nikola.

The big picture: Nikola's value soared after going public in June, and GM took an 11% stake earlier this month and agreed to build its planned Badger pickup and supply tech for that vehicle and other planned semi-trucks.

  • Just days later, Hindenburg Research, which is shorting Nikola, issued a scathing report calling it an "intricate fraud" based on "lies" by Milton. He has disputed the claims.
  • The Securities and Exchange Commission and the U.S. Attorney’s Office for the Southern District of New York are both reportedly looking into the claims.

Details: Milton, in a statement, said "the focus should be on the company and its world-changing mission, not me."

  • Stephen Girsky, a former GM executive already on Nikola's board, is taking over as board chairman immediately.
  • Nikola's stock was down roughly 24% in pre-market trading.

Go deeper: GM's eyes are wide open on Nikola partnership

Source: Read Full Article

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