US startup Nikola announced last Friday that it is going to sue Hindenburg Research over its ‘malicious report’, which calls the vehicle manufacturer a fraud.
Reuters report that Hindenburg Research, a short-seller, accused Nikola’s founder Trevor Milton of nepotism and said it has gathered enough evidence to show that Milton made false statements to form partnerships with a large automaker. Milton was referring to General Motors, which announced last week the acquisition of an 11% stake in Nikola. The two companies are to join forces to build electric Badger pickup trucks and fuel cell commercial trucks.
However, according to Hindenburg Research, Nikola has not created any working prototypes, does not have any proprietary technology, and has created a recording of a moving prototype by pulling it up a hill and allowing it to descend freely.
Nikola seems to be bringing nothing to the partnership but concept designs, their brand name and up to $700 million they will be paying GM for costs related to production,” said Hindenburg Research.
Furthermore, according to the report, Milton has appointed his brother, Travis, as manager of the Hydrogen Production/Infrastructure Unit, even though he does not have any significant experience in the sector (he previously worked as a subcontractor for small construction work in Hawaii on a self-employed basis).
The company asked Nikola 53 questions, but the startup did not answer any of them. Despite this, the manufacturer has stated that the report drawn up by Hindenburg Research is unreliable and has announced a lawsuit accusing the short-seller of manipulating the high-flying stock for its own benefit.
The founder of Hindenburg, Nathan Anderson, said that he was pleased to hear about Nikola’s lawsuit. It is also worth mentioning that Hindenburg Research’s activities were supported by Muddy Waters and Citron Research, among others, which are involved in disclosing irregularities in companies.
Photo credit @Nikola Motors