Nikola Motor said on Friday that it had “nothing to hide” and threatened legal action against a short-seller who levied allegations of fraud against the US electric truck start-up.
The threat comes a day after Hindenburg Research issued a detailed report that cast doubt over Nikola’s technology, accused the company of faking a product video and raised questions over past business ventures of the US start-up’s founder Trevor Milton.
In a statement on Friday, Nikola said that “we have nothing to hide and we will refute these allegations”. The group, whose shares have become one of Wall Street’s hottest properties since its June listing, added that it had hired law firm Kirkland & Ellis “to evaluate potential legal recourse, including with respect to the activist short-seller and any others acting in concert.”
Nikola, which listed through a special purpose vehicle that avoids some of the scrutiny of a traditional initial public offering, has promised to “revolutionise” trucking and battery technology, though it will use General Motors’ own battery systems in its first passenger vehicle.
This week, Nikola, which says it develops hydrogen and battery-powered trucks, struck a deal that will see GM build its first pick-up truck, the Badger.
The report from Hindenburg, which said that it was betting against Nikola’s stock, claimed that the start-up had overstated its technology as well as the readiness of its flagship full-sized haulage truck.
Nikola shares fell 12 per cent on Thursday following the release of the report, and were down another 8 per cent in early trading on Wall Street on Friday.
Late on Thursday evening, Mr Milton wrote on Twitter that the company was preparing a “clear, factual, low-emotional answer to the report” to be released on Friday before the US stock market opened. “I feel great about every answer,” he wrote to his 96,000 followers.
The company’s statement on Friday disputed the accuracy of the report, describing it as a “hit job for short sale profit driven by greed”. Nikola accused Hindenburg of making “misleading information and salacious accusations directed at our founder and executive chairman”, though it did not offer a detailed rebuttal to the allegations.
Posting the statement on Twitter, Mr Milton called the allegations “false and deceptive” but added “on advice of counsel, however, I won’t comment further now other than saying that we have involved [the] SEC”.
In its own statement on Friday, Hindenburg said that “the company answered none of the 53 questions we asked in our report after promising a full rebuttal. We are pleased that Nikola is engaging with the SEC, and we are not surprised that Trevor Milton is not commenting further on advice of counsel.”
So far, one claim made in the report — that Nikola faked a product video by rolling a power-less truck down a hill to make it appear it was driving — has been verified by the Financial Times.