Home / SmartTech / Nikola denies fraud claims in a carefully crafted counter-argument – TechCrunch

Nikola denies fraud claims in a carefully crafted counter-argument – TechCrunch

Nikola Corp., the hydrogen-electric vehicle startup that went public earlier this year through a merger with a special-purpose acquisition company, released a punctual counter-argument on Monday attempting to refute one report, the latest Week published by the short seller Hindenburg Research was the Society of Fraud.

Despite the careful wording of the counter-arguments, some of the company’s counterpoints raise more questions and even reveal problematic advertising tactics.

Nikola’s prolonged rejection follows a series of tweets penned by founder Trevor Milton last week, which called the activist short-seller’s report a “hit job” on false accusations. Milton also said the company has retained the Kirkland & Ellis LLP law firm. Hindenburg Research̵

7;s report, released September 10, two days after GM announced it would acquire an 11% stake in Nikola, dropped the company’s share price into free fall.

Nikola shares are up 7% on the Monday following their rebuttal.

“Nikola believes that the Hindenburg report and the opportunistic timing of its publication shortly after the announcement of Nikola’s partnership with General Motors Co. and the resulting positive response to the share price were intended to mislead investors and to manipulate the market negatively in order to provide financial advantages for short sellers, including Hindenburg himself, ”Nikola said in his counter-argument published on Monday.

After each of the points Nikola denies or explains, the company has made the following statement: “These short seller claims are false and misleading and are designed to manipulate the market to take advantage of an established decline in Nikola’s stock price.”

The Hindenburg Research report raises questions about the validity of Nikola’s claims over the years, as well as allegations of nepotism.

Two that stand out – especially because Nikolas response seems to confirm Hindenburg’s criticism – focus on the company’s first tractor-trailer, the Nikola One. Hindenburg said the truck was not fully functional, a claim that backed up an article from Bloomberg earlier this summer that reported the company exaggerated its capabilities. Hindenburg also claims in his report that a 2017 promotional video of the Nikola One showing it rolling down a hill misrepresented the prototype’s capabilities.

Nikolas counter-argument tries today to get these claims to the point. The company announced that the Nikola One, unveiled in 2016, is designed for propulsion and self-propulsion and includes a list of working parts such as the gearbox and batteries. However, Nikola then states that the company has “moved to the next generation of trucks” and “has decided not to invest additional resources in completing the process so that the Nikola One can run on its own”.

Nikola gets creative again with the wording to explain the 2017 promotional video and says: “I never stated in the video that his truck was driving under its own drive, even though the truck was designed to do just that. ”

Nikola said the truck was exhibited and filmed for a commercial by a third party. Nikola said in his statement that this third-party video was described as “In Motion” on the company’s social media.

“It was never described as being“ self-propelled ”or“ powertrain powered. ”Nikola investors who invested during this privately owned company knew the technical capabilities of the Nikola One at the time of their investment “Said the company.

However, this contradicts earlier statements by Milton, who repeatedly said the vehicle was not a “trigger”. Nikola also provides no further explanation of what, if anything, powers the prototype. Instead, the company is focusing on the fact that this prototype has been completely thrown overboard and is therefore irrelevant.

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