It was just a short while ago that it was good times for hydrogen fuel cell truck maker Nikola Motors.
The company went public after a mid-Q2 merger with a shell company created specifically for the process of taking a private company public. Rising quickly to a price of $27 per share in May, the stock shot up to over $90 per share in June.
Supply Chain Digest Says...
|
 |
Interestingly, JPMorgan reiterated its "buy" rating for Nikola despite all the turmoil. |
 |
What do you say? |
| Click here to send us your comments |
 |
| Click here to see reader feedback |
|
It fell back to about $30 per share in late July, but then jumped again to over $40 per share after Nikoloa said it had received an order for 2500 of its electric trucks from sanitation company Republic Services. Then it jumped to more than $50 just two weeks ago after the company said General Motors was taking an 11% stake in Nikola to team up on an electric passenger truck. General Motors would also become the exclusive supplier of fuel cells to Nikola's Class 7/8 trucks in all areas besides Europe, the companies said.
The story line is a little different now.
Last week, a short-seller company named Hindenburg Research, which would profit handsomely from a decline in Nikola's stock price, issued a report accusing Nikola and Executive Chairman and co-founder Trevor Milton of making deceitful statements and exaggerating the progress on some of its key technology, including on hydrogen-powered semi-trucks.
The 67-page report said Nikola was an "intricate fraud"
and included examples that the Hindenburg said supported its allegations.
After the Hindenburg report, The US Justice Department said it has joined securities regulators in examining the allegations, according to people familiar with the matter, the Wall Street Journal reported.
On Friday afternoon, Nikola's Chief Financial Officer Kim Brady told an investor conference that the company would issue a more detailed response to the allegations this week.
The company's stock price has been about cut in half from recent highs, falling to just over $27 per share in trading Monday.
All that led to the ouster of Milton, who resigned Monday.
"The focus should be on the company and its world-changing mission, not me. I intend to defend myself against false allegations leveled against me by outside detractors,"
Milton said.
The company said Milton would be succeeded by Stephen Girsky, a former General Motors Co. executive who already sits on the truck company's board.
(See More Below)
|
CATEGORY SPONSOR: SOFTEON |
|
|
| |
|
|
 On Monday, GM said it would continue to work with Nikola to close the transaction it announced nearly two weeks ago and reiterated that the collaboration will help it further expand its battery and hydrogen fuel-cell business.
In an 8-K filing with the Securities and Exchange Commission explaining its founder's reasons for stepping aside, the company noted that Milton will remain an "unpaid consultant"
and "will be making himself reasonably available to provide consulting services"
through the end of 2020.
Milton still holds 91.64 million shares, or a 24.18% stake in the company.
Yahooo reports that in the company's 10-Q report issued last month, Nikola said it's "highly dependent"
on the services of Milton - and now says its arrangement with the founder going forward reflects that relationship.
As part of the agreement, the company committed to paying for "reasonable costs of a security inspection"
of Milton's residence and said it will reimburse him for up to $100,000 for a full-time security detail for three months.
Interestingly, JPMorgan reiterated its "buy" rating for Nikola despite all the turmoil.
Any reaction to the Nikola scandal? Let us know your thoughts at the Feedback section below.
|
