Nikola founder Trevor Milton resigns as chairman amid allegations, SEC probe

Daniel Fowler
September 21, 2020

Italy's CNH was one of the top losers on Milan's bourse on Monday, its shares down over 6% in early trade, after the founder of US electric truck maker Nikola Corp's stepped down as executive chairman, a trader said. Milton is succeeded by Stephen Girsky, a former General Motors executive who was already on the company's board. "In addition to being an early believer and supporter of Nikola, Steve has more than 30 years of experience working with OEM leaders, suppliers, dealers, labor leaders and national policy makers, and has served as a director of numerous public companies".

"Nikola is truly in my blood and always will be, and the focus should be on the Company and its world-changing mission, not me", Trevor Milton said.

The zero-emission truckmaker's stock had roughly halved in value since 8 September, when a "short-seller" calling itself Hindenburg Research published a report in which it alleged that Nikola had made multiple false statements around its products and technologies.

"I intend to defend myself against false allegations leveled against me by outside detractors", he said in a tweet.

The U.S. Department of Justice and the U.S. Securities and Exchange Commission are said to be probing the claims made in the report.

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Hindenburg also compiled a detailed account of Nikola's early days, including Milton's business patterns in the past.

Shares in electric and hydrogen-powered truck startup Nikola plunged on Monday after the company's founder resigned amid allegations of fraud - just two weeks after signing a $2 billion partnership with General Motors.

Nikola said at the time that it had hired a law firm to explore legal action against Hindenburg and that it planned to bring the matter before the US Securities and Exchange Commission. These forward looking statements speak only as of the date hereof and Nikola specifically disclaims any obligation to update these forward looking statements. The company has denied making misleading statements. More recently, the company released information on its battery-electric pickup truck, the Badger, to be developed through a a strategic alliance with General Motors.

Investors have sometimes struggled to keep up with Milton's messages, especially given the evolving list of projects Nikola is pursuing: battery-electric big rigs in Europe, fuel-cell-powered semis in the USA, an electric pickup to be built by GM and becoming the preeminent supplier of hydrogen for fleets of vehicles.

"It's a bit confusing trying to follow Trevor on his various social-media outlets about the timing and cadence of communication of the different variables that you're talking about", Jeff Osborne, a Cowen & Co analyst, told executives during Nikola's first earnings call on Aug 4. It plans to build a battery electric semi-truck with CNH Industrial's Iveco at a facility in Ulm, Germany, by the end of next year. GM will provide the fuel cells and battery packs.

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