Why Nikola Stock dived today
Actions of Nicolas (NASDAQ: NKLA) fell sharply on Thursday after Hindenburg Research released a scathing report on the electric truck maker. As of 11:15 a.m. EDT, Nikola stock was down 10%.
Hindenburg Research – a famous short seller – accused Nikola of being “a complex fraud based on dozens of lies” in his report released today.
“We have gathered a great deal of evidence – including recorded phone calls, text messages, private emails and behind-the-scenes photographs – detailing dozens of false claims by Nikola founder Trevor Milton,” Hindenburg wrote. “We have never seen this level of deception in a public company, especially of this size.”
The report goes on to say that Nikola has repeatedly exaggerated its battery and fuel cell technology beyond its true capabilities and overestimated its progress towards developing its electric truck.
Hindenburg also argues that Nikola’s recent $ 2 billion agreement with auto giant General Motors (NYSE: GM), which will supply the batteries and fuel cells for its electric semi-trailer trucks, provides further proof that Nikola has inflated its own technological capabilities.
Nikola founder and executive chairman Trevor Milton responded to Hindenburg’s report on Twitter saying “Is that all you’ve got?” He also promised to respond in more detail to Hindenburg’s “lies” later today.
It makes sense. Tens of millions of shares were sold short on the last day or two to slam our shares and hit the job by Hindenburg. I guess everything is a fair game in war, even a successful job. I know who funded it now. Give me a few hours to prepare answers to their lies. Is that all you got?
– Trevor Milton (@nikolatrevor) September 10, 2020
Nikola shareholders are no doubt eagerly awaiting Milton’s rebuttal, which could help the stock bounce back, according to what he has to say.
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