Nikola threatens legal action against a short-seller who accused the electric truck startup and its founder of fraud

Nikola Trevor Milton
CEO and founder of U.S. Nikola Trevor Milton attends a news conference held to presents its new full-electric and hydrogen fuel-cell battery trucks in partnership with U.S. Nikola, at an event in Turin, Italy, December 3, 2019.

Nikola's chairman on Friday threatened legal action against a short-seller that accused the electric-truck startup of nepotism and deception.

After previously promising a detailed response to Hindenburg Research's numerous claims of lies, founder Trevor Milton said that Nikola has hired a law firm to "evaluate potential legal recourse." The firm also plans to raise the issue with the Securities and Exchange Commission, it said.

"The author wanted emotion and we won't give it to them," Milton said on Twitter.

On Thursday, Hindenburg published a lengthy report, citing what it claims to be text messages with former Nikola employees, contracts by Nikola and Milton's previous ventures, and other evidence supporting its short-bet against the company's high-flying valuation.  Nikola's stock price fell about 11% in trading Thursday after the claims.

In one particularly salient instance, the firm claims to have proof — backed up by its own testing — that Nikola shot video of one of its first semi trucks in motion by simply allowing it to coast downhill along a low-grade stretch of highway in Utah.

Hindenburg's report comes just days after Nikola announced a $2 billion deal with General Motors to develop electric vehicles with the automaker.

"We have nothing to hide and we will refute these allegations," Nikola said. "They have already taken up more time and attention than they deserve."

Shares of Nikola continued to fall as markets opened Friday, sinking as much as 15% to the stock's lowest price since July.

 

 

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