DETROIT – A couple of weeks ago, General Motors traded production capacity for $2 billion worth of Nikola stock. Now, Nikola’s executive chairman and founder is stepping after a fraud claim.
Nikola is touting hydrogen-based electric vehicles. Hindenberg is a hedge fund, and it shorted Nikola’s stock. That’s a bet the stock price will go way down, so millions of dollars are at stake.
The fraud claim comes from the hedge fund, largely against 39-year-old Nikola founder Trevor Milton.
He gave up the CEO chair when the company went public in June.
On Sept. 8, he announced his deal with General Motors. The next day, the hedge fund made its claim, which brought the Securities and Exchange Commission into the situation.
Milton stepping away changes little about the Nikola Badger itself, according to Guidehouse insights auto analyst Sam Abuelsamid.
“Is it a real product today in 2020? No, but they’re also not in production yet,” Abuelsamid said. “They’re still in development. By the time they get to their production date, I expect that it will be.”
General Motors is unbowed by Milton’s exit.
“We acknowledge Trevor Milton’s departure from Nikola and the decision of the Nikola board to move forward,” General Motors officials said in a statement. “We will work with Nikola to close the transaction we announced nearly two weeks ago to seize the growth opportunities in broader markets with our hydrotec fuel cell and ultium battery systems, and to engineer and build the Nikola Badger.”
“Stepping away from the operations of the company may help it settle some of this down and let the people that are actually working on the products get down to the job of developing trucks for production,” Abuelsamid said.
General Motors officials might prefer that the person who took over as executive chairman is Steve Girsky, who was vice chairman of GM during the downturn. He is a well-known commodity.
General Motors isn’t the only company that sees promise in the Nikola hydrogen technology. Three other major trucking and supplier companies have signed partnership agreements with Nikola.
Milton will keep his 20% stake in the company.