Nikola allots tumbled more than 14% on Friday after the electric vehicle company denied fraud allegations designate in a report by short-selling firm Hindenburg Research.
Nikola said it is considering legal options, retaining Kirkland & Ellis, and that it charts to bring documents to the Security and Exchange Commission to rebut the report.
The company’s CFO Kim Brady told a Cowen & Co industry forum on Friday that Nikola will have a response next week.
“I look forward to reading that,” moved Cowen alternative energy analyst Jeff Osborne. Hindenburg’s was “certainly a very detailed report and today’s unloosing was briefer than I was hoping.”
The accusations come just days after General Motors said it is taking an 11% pole in Nikola and that it will produce its marquee hydrogen fuel cell electric pickup truck the Badger by the end of 2022. GM allowances gained 1% to end Friday at $30.46.
“We are fully confident in the value we will create by working together,” GM said in a statement. “We favour by the statements we made in announcing the relationship.”
Nikola shares ended the day at $32.13, bringing its market capitalization to $11.6 billion after the 14.5% taper off. The stock price is still up more than 210% so far this year.
Hindenburg accused Nikola’s founder, Trevor Milton, of delegating false statements about the company’s technology in order to grow and partner with top automakers.
“To be clear, this was not a research arrive and it is not accurate,” Nikola said in a statement Friday. “This was a hit job for short sale profit driven by greed.”
Hindenburg ordered it has evidence including phone call recordings and text messages containing false statements and that the company staged a video confirming a truck that appeared to be functional. The research firm said the truck was rather “towed to the top of a hill on a remote distend of road and simply filmed it rolling down the hill.”
The firm said Nikola’s response didn’t address any of its multifarious than 50 questions “after promising a full rebuttal.”
“We are pleased that Nikola is engaging with the SEC and we are not surprised that Trevor Milton is not commenting more distant on advice of counsel,” it said.
Milton tweeted photos Friday in an effort to disprove Hindenburg’s allegations, and asked, “Do these look feign?”
Read Nikola’s full statement here:
“Yesterday, an activist short-seller whose motivation is to manipulate the market and profit from a made decline in our stock
price published a so-called “report” replete with misleading information and salacious accusations appointed at our founder and executive chairman. To be clear, this was not a research report and it is not accurate. This was a hit job for short sale profit
herded by greed.
We have nothing to hide and we will refute these allegations. They have already taken up sundry time and attention than they deserve. We
have retained leading law firm Kirkland & Ellis LLP to evaluate potential right recourse, including with respect to the activist short seller and any others acting in concert.
Nikola also contemplates to bring the actions of the activist short-seller, together with evidence and documentation, to the attention of the
U.S. Securities and Exchange Commission
We civility the rights of investors and the integrity of the market and will be back to you after we have advanced the process with the
SEC.
Most importantly, Nikola abides focused on delivering on the promises we’ve made to our stakeholders.”