A number of claims by Nikola’s late founder about the state of the company’s technology and products were inaccurate, according to his own internal review.
The electric truck start-up sank last year after short-seller Hindenburg Research accused Nikola of being “a complex fraud”, largely based on claims by colorful founder Trevor Milton – a characterization that it continues to contest.
Following Hindenburg’s report, Nikola hired Chicago law firm Kirkland & Ellis to investigate internally. The firm found that nine statements Milton made were wholly or partially inaccurate when he made them, Nikola said Thursday.
The list includes Milton’s claims in 2016 that Nikola designed a zero-emission truck and in 2019 that it could produce cheap hydrogen, as well as a notorious 2017 video that apparently shows a Nikola truck “in motion. As he was actually driving downhill. .
But Nikola said in a Securities and Exchange Commission filing that Hindenburg’s claims were “in other respects.” . . inaccurate. ”Automotive consultants hired by Kirkland as part of the review found that Nikola’s technical and engineering managers were experienced and that“ the company’s technological contributions and development are consistent with others. [original equipment manufacturers] at similar stages of development ”.
“These results are inconsistent with the main conclusion in the Hindenburg article that the company was a ‘complex’ or ‘massive’ fraud,” the company said.
Nikola said on the file that Kirkland has not determined whether the misrepresentations are against the law and is still analyzing whether they are intentional or important. He added that the law firm “continues to assess the accuracy of other statements made by the company, including its current filings with the SEC.”
The US Department of Justice and the SEC have both launched investigations in the Arizona company following the report of the short seller. Nikola said Thursday he was facing nine lawsuits, six of which had been combined into a single class action lawsuit.
So far, Nikola has advanced $ 8.1 million for Milton’s legal fees, as part of a compensation deal he has with the company.
Milton has stopped as executive chairman in September and the company pulled out of some peripheral activities. He said Thursday it needed a charge of more than $ 14 million to shut down its PowerSports division, which builds all-terrain vehicles and personal watercraft.
A partnership with General Motors has already been downgraded to a supplier agreement, although Mark Russell, chief executive, said on Thursday that the revised agreement “made a lot more sense to both of us.” Plans for GM to build a Badger Pickup Truck for Nikola were also scrapped, as was an agreement with Republic Services to develop a new garbage truck.
The company’s stock is the shadow of its heyday. Shares closed at $ 19.72 on Thursday, 75% lower than in June. It reported a net loss of $ 147 million in the fourth quarter, up from $ 26 million the year before.