Nikola Corp., the lively electrical shipping company, defends itself against fraud allegations from the short seller Hindenburg Research. The allegations came just days after GM announced it would take an 11 percent stake in the startup.
Nikola said the Hindenburg Research report was “false and defamatory” and “intended to mislead investors and manipulate the market negatively to financially aid short sellers, including Hindenburg himself.”
The startup said it had notified the US Securities and Exchange Commission of the report and would work with the agency on the “investigation”. (A SEC spokesman declined to comment.) The Phoenix-based company also said it engaged law firms Kirkland and Ellis to evaluate its options.
Hindenburg’s report, released September 10, is titled “How to Partner an Ocean of Lies with America’s Largest Automaker” – a reference to the news that GM has partnered with Nikola on the battery of the startup to develop and manufacture. Electric and hydrogen fuel cell vehicles. Hindenburg claims Nikola dealt with “lies and deceit” to showcase his electric vehicle technology, including staging a video of one of his trucks driving down a hill.
“Our investigation of the website and the text messages of a former employee showed that the video was an elaborate ruse,” writes Hindenburg. “Nikola towed the truck up a hill on a remote stretch of road and just filmed it rolling down the hill.”
In a statement Monday, Nikola said the report contained “dozens” of inaccurate statements and outlined several examples. However, the company does not deny that it staged the video that appeared to show the truck in working order.
“Nikola never stated in the video that his truck was driving under its own drive, even though the truck was designed for exactly that (as described in the previous point),” explains the company. “The truck was presented and filmed by a third party for a commercial. Nikola described this third-party video as “In Motion” on the company’s social media. It was never described as “self-propelled” or “drivetrain powered”. “
The company said it ultimately decided not to finish the vehicle and instead shift resources to another truck called the Nikola Two. Nikola claims that a pre-production version of this truck, a “hydrogen-electric powered semi-trailer truck for medium and long haul transport,” will be ready for testing in 2021.
“This three-year-old video of a Nikola prototype is irrelevant except that the short seller is trying to use it for his main thesis,” the company added. “The fact is, Nikola has real working hydrogen fuel cell powered semi-trailers.”
Nikola was founded in 2015 and has set itself the goal of producing large-scale, emission-free systems with hydrogen fuel cell technology. While a number of companies like Tesla, Daimler, Freightliner, and other established companies and startups are working on all-electric trucks, Nikola is one of the few companies pursuing large-scale hydrogen-powered facilities.
It’s also not the only EV company with a controversial relationship with a growing contingent of short sellers betting money on a company’s stock price going down. Tesla has a thriving community of short sellers who gather on Twitter where they team up around the $ TSLAQ cash tag to find out what they think is fraudulent activity by the company and its CEO Elon Musk.