Shares of Nikola Corporation NKLA have sold off over the past week on allegations from activist short seller Hindenburg Research.
“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 share price reaction, was designed to provide a false impression to investors and to negatively manipulate the market in order to financially benefit short sellers, including Hindenburg itself,” the release said.
Nikola has contacted and briefed the U.S. Securities and Exchange Commission to look into false and misleading claims by Hindenburg.
The press release from Nikola states it has been through “extensive due diligence processes” with several companies since 2018. This includes Bosch in 2017, Hanwha Group in 2018, Value Act Capital in 2018, CNH Industrial N.V. CNHI in 2019, VectolQ Acquisition Corp in 2020, and General Motors Company GM in 2020.
Why It’s Important: Nikola responded to the huge list of allegations from Hindenburg. The start of the release and rebuttal highlights Nikola’s list of partners.
Nikola recently announced a strategic partnership with General Motors that included an equity position shortly before the short report. Hindenburg’s report put blame on General Motors for not doing due diligence. Nikola is stating that all the companies it has partnered with have done their due diligence and validate the company’s future.
Nikola’s press release also included the names of companies that have placed orders based on the technology and validity of the company.
Anheuser-Busch InBev BUD has a deal for 800 Nikola Two Hydrogen-Electric Powered Semi-Trucks. These trucks are expected to go into pre-production in 2021 and begin testing in 2022.
Republic Services Inc. RSG signed for a minimum of 2500 electrified refuse trucks from Nikola. These are expected to begin testing in 2022 and begin deliveries in 2023.
Nikola also states a Bosch employee was misquoted.
“Specific instances in the (Hindenburg) report quoting a Bosch employee were taken out of context. The employee spoke only about Bosch’s own plans for the IAA industry show and H2Haul project for the European Union. Nikola and Bosch are aligned on the product roadmap for the Tre truck,” the release said.
What’s Next: Short sellers continue to pour into Nikola and are making profits from the continued selloff.
“Nikola remains laser-focused on laying the groundwork toward becoming the global leader in zero-emissions transportation,” according to the release.
Nikola shares have been on a wild ride in 2020, trading between $10.20 and $93.99. Shares climbed back into the $50 level on news of the GM partnership. Shares fell 14% on Friday to close at $32.13.
Shares are trading down 3% to $31.11 on Monday morning.
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