Plus, any time something like this fails after a huge amount of hype for the tech, it press a fist right in the eye of similar techs that may have been more viable.
Advertising and perception affect a lot more people than just the ones handing over the dollars, especially when the amount of money flowing is so large and so based on publicity.
DOJ has now joined the investigative party on Nikola.
Time to bring out the jam, because I think these guys are toast.
From GMs point of view, they got one the best freebies ever. Nikola assumed that by giving up so much in partnership with GM, they would bank and make more money on the press. I mean look at what GM is getting:
$700M in cash to build a production line that GM retains full ownership of.
$2B to design a vehicle platform that GM retains full ownership of.
Profit on the front end, as an exclusive major drivetrain component supplier
Profit on the back end, thanks to a cost-plus nature of the contract
Profit off all of Nikola's alleged other products (Class 7/8) trucks, as exclusive drive train supplier
Most of Nikola's ZEV credits
Its like the group project where someone offers to do all the work, just to brag that they hang out with the cool kids.
Nikola Founder Trevor Milton Steps Down Amid Fraud Allegations
It's a stunning reversal of fortune for Milton, who until recently was seen by many as the next Elon Musk.
continues: https://www.thedrive.com/news/36576/...d=twittershareBy Patrick George
September 21, 2020
In the span of just a few weeks, Trevor Milton went from being the youngest newcomer on Forbes' 400 Billionaires List to suddenly stepping down from Nikola Corporation, the electric and hydrogen truck startup he started, amid allegations that the company is an "intricate fraud."
Milton announced early this morning that he would step down as Executive Chairman of Nikola and vacate his board seat. The move came 10 days after a financial research firm that had taken a short position in Nikola, Hindenburg Research, issued a detailed and scathing report that alleged Milton committed a number of fraudulent acts to help the company achieve its $20 billion valuation.
Milton and Nikola refuted the firm's allegations, but not all of them. And in one statement, the company did admit it rolled a non-running truck down a hill for a misleading "in motion" video ad released in 2018. The U.S. Department of Justice and the Securities and Exchange Commission have both since opened investigations into the company.
just want to put this here for posterity
or any number of nikola threads over the years. some of us have been calling bull**** on this place since day 1.
BTW latest update - the guy just got arrested at Phoenix airport ~
From: Tech Crunch
Nikola’s chairman steps down, stock crashes following allegations of fraud
Matt [email protected] | 8:19 am EDT•September 21, 2020
Image Credits: Nikola
Update: News is breaking that Trevor Milton, Nikola Corp. founder and former executive chairman, was arrested by the DOJ and FBI at Sky Harbor Airport, in Phoenix, Arizona, this morning. This is so far unconfirmed.
Nikola Corp. founder and Executive Chairman Trevor Milton is stepping down from the electric truck company effective immediately. This comes in the wake of a report from a noted short-seller accusing the company of fraud. Milton is succeeded by Stephen Girsky, a former General Motors executive who was already on the company’s board.
Nikola company stock fell as far as 30% in pre-market trading, currently trading around $25 a share. Over the last few months, the stock experienced wild trading; at one time the stock hit $79 a share.
“The focus should be on the company and its world-changing mission, not me. I intend to defend myself against false accusations leveled against me by outside detractors,” Milton said in a statement posted on Twitter.
This month, Hindenburg Research, a short-seller, published a report alleging Nikola is misleading investors. Nikola refutes the claims.
“These allegations by the short seller are false and misleading and designed to manipulate the market to profit from a manufactured decline in Nikola’s stock price,” Nikola said, following Hindenburg Research’s report.
This report came on the heels of a significant deal for Nikola. The young automaker had just signed an agreement with General Motors that gave GM 11% ownership in the upstart in exchange for technology and assistance getting Nikola’s first model to market.
Electric trucks, both consumer and commercial versions, are quickly becoming a battleground for automakers. The market is ripe for innovation, and incumbent automakers are looking for partners to kickstart operations. Ford, the leader in consumer trucks, sided with Michigan-based Rivian, which is helping develop electric vehicles for Ford. General Motors’ recent partnership with Nikola seemed smart at the time of its announcement. Still, now, after the Hindenburg report, the viability of the deal is in question, and with that, the future of GM’s electric pickup.
fwiw, his team is denying he was arrested...
This is a moving target, but at least twitter's got jokes...
Is that Trevor Milton arrest rumor real? I'm expecting something like this is a few minutes --->> Milton denies arrest.. says he's been driving 65 MPH in a Nikola One all morning
https://insiderpaper.com/trevor-milt...-social-media/Nikola founder Trevor Milton not arrested by DOJ, FBI [UPDATE]
September 21, 2020 11:50 am
UPDATE: Brian Sozzi, the editor at large of Yahoo Finance has confirmed the news that Trevor Milton has not been arrested.
I wonder how this will effect VC funding for other EV startups?
Have to really wonder about stuff like this...
An Ultra-Secret Battery Startup Hints That It’s Blown Past Tesla — But Won’t Show the Goods
Experts question the claim by QuantumScape, backed by $500 million from Bill Gates, Silicon Valley venture capitalists, and VW