After a short seller targeted Nikola Corporation NKLA over alleged deception, the electric car maker received a show of support from General Motors Company GM.
What Happened: General Motors CEO Mary Barra, during a conference with RBC Capital Markets on Monday, claimed that the company conducted "appropriate diligence" when entering into a $2 billion partnership with Nikola, CNBC reported.
“The company has worked with a lot of different partners and we’re a very capable team that has done the appropriate diligence,” Barra said, according to CNBC.
Why Does It Matter: General Motors and Nikola announced on Sept. 8 they were entering into a $2 billion 10-year partnership, where the former would engineer and manufacture Nikola’s pickup truck Badger.
Short seller Hindenburg Research in a report Wednesday alleged that Nikola is deceiving investors and claimed misrepresentation on the part of the electric vehicle company.
As a part of the $2 billion agreement, GM received an 11% stake in Nikola. However, the short seller's report suggested that the deal was a result of analyst and shareholder pressure after Wall Street’s EV stock buying frenzy.
The United States Securities and Exchange Commission is probing the Hindenburg allegations against Nikola, according to a Bloomberg report late Monday.
Price Movement: Nikola shares slumped 8.13% at $32.88 in the after-hours session Monday, after a 11.39% uptick during regular hours.
GM stock marginally declined to $30.92 per share in the after-hours.
Photo courtesy: Nikola Corp.
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