The financial forensics firm Hindenburg Research recently released a scathing 67-page report (and follow up) accusing the electric semi-truck unicorn Nikola Motor Company of being an “intricate fraud built on dozens of lies.”
Here are a few of the greatest hits from the report, along with our verdict:
Strike #1: Nikola is super dependent on GM.
- Explanation: Per a deal between the companies, GM will handle all engineering, validation, and manufacturing of Nikola’s Badger truck and fuel cells. In return, Nikola will pay GM a cool $700m, plus an 11% stake in the company.
- Verdict: If a partner bailing means you can no longer create your product, did you ~really~ ever have a product? If so, we have a bridge in Brooklyn to sell you.
Strike #2: Its truck isn’t quite fully functional.
- Explanation: In 2018, Nikola released a video supposedly showing a fully operational truck in motion. Turns out, it was just rolling down a hill.
- Verdict: OK, so the car company… made a vehicle… that can’t actually move on its own? Sounds even less sophisticated than our soapbox derby car (funding: zero dollars).
Strike #3: The SEC and DOJ are on the company’s tail.
- Explanation: Both government agencies are now said to be investigating Nikola for having “misled investors about its tech.”
- Verdict: Getting accused of fraud online = your friends singing “oooh, you’re in trooouble.” Getting investigated by the SEC and DOJ in real life = your parents telling you to sit your ass down on the couch and start explaining.
Final Verdict: Book ‘em, Danno.
(To be thorough, Nikola’s shares actually rallied today after a JPMorgan analyst defended the EV firm).