Nikola Corporation (“Nikola”) claims to manufacturer and design battery-electric vehicles, hydrogen-electric vehicles, and hydrogen fueling stations. Trevor Milton, who has been active on social media about sustainable energy, founded Nikola in 2015. On June 4, 2020, Nikola started trading on the NASDAQ exchange after a reverse merger with VectoIQ Acquisition Corp. Nikola claims their vehicles will run on hydrogen fuel-cells, which convert hydrogen into energy. Elon Musk, the co-founder of Tesla, Inc., has mocked Nikola’s core fuel-cell technology in the past tweeting “fuel cells = fool sells.”
Shortly after trading publicly, on September 8, 2020, Nikola announced a strategic partnership with General Motors. Through the deal, General Motors gets 47,698,545 Nikola common shares valued at $2 billion USD, and in return will produce Nikola’s fuel cell pickup truck by the end of 2022.
On September 10, 2020, Hindenburg Research issued a report titled: "Nikola: How to parlay an Ocean of Lies into a Partnership with the Largest Auto OEM in America." In the report, Hindenburg claimed they “gathered extensive evidence—including recorded phone calls, text messages, private emails and behind-the-scenes photographs—detailing dozens of false statements by Nikola Founder Trevor Milton.”
Then, on September 14, 2020, Nikola responded to the report claiming Hindenburg’s allegations were inaccurate and that Nikola contacted and briefed the U.S. Securities and Exchange Commission (“SEC”) regarding Nikola’s concerns about the Hindenburg report. On the same day, Bloomberg reported that the SEC was looking into whether Nikola may have violated securities laws.
Further, on September 15, 2020, Hindenburg published another report concluding that Nikola's failure to provide a substantive response to its exposé as "a tacit admission of securities fraud." On the same day, The Financial Times reported that the U.S. Department of Justice was also looking into Hindenburg's accusations.
Faruqi & Faruqi, LLP is actively monitoring the situation.