The US Securities and Exchange Commission is reportedly investigating allegations that Nikola Corp. is involved in an alleged “complex fraud”. This is the latest development in controversy that broke out last week just days after GM acquired 11% of the newly listed company.
Bloomberg reported Monday that the US agency was reviewing the company to assess the merits of the short-seller Hindenburg Research’s allegations. The Bloomberg report, based on unnamed sources, dropped Nikola shares more than 9% in after-hours trading.
“Nikola welcomes the SEC’s involvement in this matter,” the company added in the statement. TechCrunch has asked the SEC for confirmation that the agency is investigating the matter.
While that saga between Hindenburg Research and Nikola began last week, questions have turned in the past few months about some of the electric car maker’s previous claims. The Hindenburg report, released on September 10, caused Nikola shares to fall and the founder took to Twitter to dispel concerns. The Hindenburg Research report raised questions about the validity of Nikola’s claims over the years, as well as allegations of nepotism.
On Monday, Nikola issued a carefully worded, punctual counter-argument that attempts to refute the Hindenburg Research report. After each of the points Nikola denies or explains, the company made the following statement: “These short seller claims are false and misleading and are designed to manipulate the market to take advantage of an artificial fall in Nikola’s stock price.”
“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.
Despite the lengthy report from Nikola – and in some cases because of it – there has been criticism of the company’s previous promotional tactics, particularly in connection with its first prototype hydrogen-electric semi-trailer truck, the Nikola One.