Founding father of Nikola, Trevor Milton speaks throughout presentation of its new full-electric and hydrogen fuel-cell battery vans in partnership with CNH Industrial, at an occasion in Turin, Italy December 2, 2019.
Massimo Pinca | Reuters
Shares of Nikola recovered from early losses Monday as the electrical car start-up disputed fraud claims made final week by short-selling agency Hindenburg Analysis.
In a press release Monday, the corporate mentioned there have been “dozens” of inaccurate allegations within the report, and it outlined particular examples.
However Nikola is not disputing certainly one of Hindenburg’s largest claims — that it staged a video displaying a truck that gave the impression to be useful however wasn’t, in addition to claims that the truck was absolutely useful.
Nikola shares have been up about 5% on Monday afternoon. They closed Friday at $32.13, bringing its market capitalization to $11.6 billion after a 14.5% drop.
Relating to the video, Nikola mentioned it “by no means said its truck was driving underneath its personal propulsion within the video, though the truck was designed to just do that.” Nevertheless, there additionally have been no disclaimers that the truck wasn’t functioning by itself.
“It was by no means described as ‘underneath its personal propulsion’ or ‘powertrain pushed,’ ” the company said. Nikola mentioned buyers on the time knew the capabilities of the prototype car, calling the 3-year-old video “irrelevant aside from the truth that the brief vendor is attempting to make use of it for its important thesis.”
The corporate mentioned it “in the end determined to not make investments further assets” to finish the car. It as an alternative shifted assets to a different pickup, often called the Nikola Two, which the corporate has demonstrated is self-propelled.
Hindenburg mentioned the truck was “towed to the highest of a hill on a distant stretch of street and easily filmed it rolling down the hill.” It was then utilized in a video, which Nikola mentioned was created by a 3rd occasion, during which the truck gave the impression to be driving by itself propulsion on flat roads.
The video was certainly one of a number of claims within the agency’s report, which was known as “Nikola: The right way to Parlay An Ocean of Lies Right into a Partnership With the Largest Auto OEM in America.”
The accusations got here days after General Motors mentioned it’s taking an 11% stake in Nikola. GM mentioned it deliberate to supply Nikola’s battery-electric pickup truck the Badger by the tip of 2022.
Hindenburg accused Nikola’s founder, Trevor Milton, of constructing false statements concerning the firm’s expertise in an effort to develop and accomplice with auto corporations.
Nikola has rejected the claims, calling the report “a hit job for brief sale revenue pushed by greed.” The corporate mentioned it has contacted and briefed the Securities and Alternate Fee concerning its “considerations pertaining to the Hindenburg report.” It additionally has retained a regulation agency concerning potential authorized motion.
In different cases, Nikola mentioned Hindenburg mischaracterized a quote from an worker of auto provider Bosch, a accomplice of the corporate; misrepresented feedback from Milton about potential developments within the firm’s battery expertise; and falsely linked the departure of a chief monetary officer to refunding deposits for first-generation variations of the corporate’s semitrucks.
Nikola didn’t tackle different claims outlined by Hindenburg. These allegations included alleged misrepresentation of the capabilities of the Nikola One throughout the car’s unveiling in 2017 and claims that the corporate’s headquarters was off the grid.
Hindenburg founder Nathan Anderson mentioned the agency finds Nikola’s assertion on Monday “utterly insufficient.”
“Nikola had beforehand promised a degree by level rebuttal to our report and this morning’s press launch didn’t ship on that promise,” Anderson mentioned in an e-mail to CNBC. “Within the few areas the place the corporate did reply, it largely confirmed our findings or just raised new unanswered questions. We will likely be issuing an in depth response.”
In a tweet Monday morning, Milton mentioned the corporate is “targeted on delivering” — one thing analysts akin to Wedbush’s Daniel Ives have been advising Nikola buyers on doing.
“Whereas we look ahead to administration addressing a few of these points, we proceed to consider seeing the forest by way of the bushes that Nikola is a narrative inventory now and its all about execution wanting forward by way of 2023,” Ives mentioned in an investor notice Monday.
Ives mentioned if Nikola can obtain targets akin to completion of an meeting plant in Arizona and constructing saleable fashions, the chance for the inventory “is very large and the inventory will mirror this dynamic.”
– CNBC’s Leslie Josephs contributed to this report.