Trevor Milton, CEO and Founder of Nikola USA, speaks during a presentation of his new all-electric and hydrogen fuel cell battery trucks in partnership with CNH Industrial at an event on December 2, 2019 in Turin, Italy.
Massimo Pinca | Reuters
Shares of Nikola were in the red for the third time in a row on Monday when the start-up for electric vehicles denied the fraud claims of the short seller Hindenburg Research last week.
In a statement Monday, the company said the report contained “dozens” of inaccurate allegations and outlined specific examples.
But Nikola doesn’t deny one of Hindenburg’s biggest claims – that it staged a video showing a truck that appeared to be in working order but not working, as well as claiming that the truck was fully working.
Nikola shares fell more than 5% on Monday morning. It closed at $ 32.13 on Friday, bringing its market cap to $ 11.6 billion after falling 14.5%.
Regarding the video, Nikola said that “in the video she never stated that his truck was driving on its own, even though the truck was designed to do exactly that”. However, there were also no disclaimers that the truck did not work on its own.
“It was never described as ‘self-propelled’ or ‘powertrain powered’,” the said Company said. According to Nikola, investors at the time knew the capabilities of the prototype vehicle and called the 3-year-old video “irrelevant, except that the short seller is trying to use it for his main thesis”.
The company said it “ultimately decided not to invest additional resources” to complete the vehicle. Instead, resources have been shifted to another pickup truck, the Nikola Two, which the company has shown is self-powered.
Hindenburg said the truck “was towed up a hill on a remote road and simply filmed it as it rolled down the hill”. It was then used in a video created by a third party according to Nikola, in which the truck appeared to be driving on its own on flat roads.
The video was one of several claims made by the company report, called “Nikola: How to Partner an Ocean of Lies with America’s Largest Automaker”.
Hindenburg accused Nikolas founder Trevor Milton of making false statements about the company’s technology to grow and partner with auto companies.
Nikola has denied the claims, calling the report “a hit for short selling profits due to greed”. The company said it had contacted and notified the Securities and Exchange Commission regarding their “concerns regarding the Hindenburg report.” It has also retained a law firm regarding possible legal action.
In other cases, Nikola said Hindenburg misrepresented a quote from an employee of the automotive supplier Bosch, a partner of the company. misrepresented comments by Milton about possible advances in the company’s battery technology; and falsely linked the departure of a chief financial officer to deposit refunds for versions of the company’s first generation semi-trailers.
Nikola did not respond to other claims made by Hindenburg. These allegations included the alleged misrepresentation of the Nikola One’s capabilities during the vehicle’s unveiling in 2017 and claims that the company’s headquarters were offline.
Hindenburg founder Nathan Anderson said the company found Nikola’s statement on Monday “totally inadequate”.
“Nikola had previously promised a punctual counter-argument to our report, and this morning’s press release failed to keep that promise,” Anderson said in an email to CNBC. “In the few areas where the company has responded, it has largely confirmed our findings or simply raised new unanswered questions. We will provide a detailed answer.”
– CNBCs Leslie Josephs contributed to this report.