Nikola CEO Trevor Milton is defending the company as its stock price falls.

Nikola Corp. just celebrated a new $2 billion partnership with General Motors and now is now defending itself against allegations of fraud from a short-selling research firm that are gaining traction throughout the investor community as its stock price falls.

Ominously named Hindenburg Research issued a lengthy report Sept. 10, alleging Nikola is guilty of a variety of charges, the most serious of them being fraud. Nikola founder and CEO Trevor Milton immediately denied them. A follow up press release called, the charges “false and defamatory.”

In the interim, the EV startup’s recently issued new stock has taken a hit, falling from a high of $50.05 on Sept. 8 when the deal with GM was announced to $33.33 in early afternoon trading today. Reportedly the Securities and Exchange Commission and the Justice Department have opened investigations.

(Battle between Nikola, Hindenburg heats up with SEC probe.)

Hindenburg’s report focuses on the capabilities – or alleged lack of them – of the Nikola One.

In the midst of the back and forth between Milton and Hindenburg’s founder Nathan Anderson, the defenders of each side are offering up their insights, most recently Stephen Girsky, who is currently a member of Nikola’s board of directors and GM’s former vice chairman, defended the Phoenix-based EV maker.

“We were comfortable with the diligence we did,” he said during an online Financial Times conference. “We are still comfortable with the diligence we did.”

Girsky’s company, VectoIQ, guided Nikola public through a reverse merger with a special-purpose acquisition company earlier this year. He further noted during his appearance that in addition to having faith in the process, he’d also experienced the company’s vehicles.

“We brought an army of people in here. We conducted a thorough process,” he said on the

Steve Girsky, the Nikola board member who helped the company through its reverse merger, said his company, VectoIQ, conducted appropriate due diligence.

webcast. “Personally, I’ve driven those trucks four times. I’ve driven on electricity. I’ve driven on hydrogen. I think they’re awesome trucks.”

(Nikola CEO Angrily refutes claims of short-selling research firm.)

Further supporting, Girsky’s assertion about Nikola is GM CEO Mary Barra who said earlier this week that GM conducted proper due diligence before closing the deal. However, that hasn’t stopped others from speculating that GM is going to exit the newly formed partnership.

Whitney Tilson, CEO of Empire Financial Research and a former hedge fund manager, has been following the events closely, wrote in recent newsletter that he can “confidently predict that General Motors (GM) will end the partnership with Nikola that it announced last week, Nikola’s stock will collapse, and Milton will end up behind bars for securities fraud.”

He noted that others in the investor community shared his negative outlook on Milton, Nikola and the deal with GM, including one that “almost feels sorry for Trevor and Nikola.”

GM Chairman and CEO Mary Barra said earlier that the company had done due diligence on Nikola too.

Nikola investor Arab Salem did not have any sympathy for Milton and his company, filing suit against the company Sept. 16 in Brooklyn federal court, according to Bloomberg. Salem is seeking to represent other shareholders and accused EV maker of making false and misleading statements.

Since the initial report, Milton and the company have refuted or explained specific portions of it; however, Hindenburg was quick to note that the limited response was telling and the few answers it offered up were insufficient to change its opinion.

(GM forges $2B deal with Nikola to build trucks, develop new electric and fuel-cell technology.)

“Nikola’s response has holes big enough to roll a truck through,” the firm said on its website.

Don't miss out!
Get Email Alerts
Receive the latest Automotive News in your Inbox!
Invalid email address
Send me emails
Give it a try. You can unsubscribe at any time.