Nikola stock craters after GM gives up equity stake in reworked deal


CEO and founder of U.S. Nikola, Trevor Milton speaks during presentation of its new full-electric and hydrogen fuel-cell battery trucks in partnership with CNH Industrial, at an event in Turin, Italy December 2, 2019.

Massimo Pinca | Reuters

Trevor Milton, founder of EV start-up Nikola, was indicted on three counts of criminal fraud by the U.S. Attorney’s Office in Manhattan for allegedly lying about “nearly all aspects of the business,” according to a grand jury indictment unsealed Thursday.

Prosecutors charged the billionaire, who resigned as chairman in September, with two counts of securities fraud, including making false statements about the company, and wire fraud.

“Milton’s scheme targeted individual, non-professional investors — so-called retail investors — by making false and misleading statements directly to the investing public through social media, and television, print and podcast interviews,” prosecutors said in the 49-page indictment. 

Shares of Nikola were down by more than 9% during premarket trading to less than $13 a share.

Nicholas Biase, a spokesperson for the U.S. Attorney’s office, said Milton self-surrendered to authorities and is expected to be presented in court later today in New York.

Milton, who was the company’s largest shareholder, held roughly $8.5 billion in Nikola stock at the height of the company’s value.

The grand jury said Milton shall forfeit all property “traceable to the commission of said offenses,” which would likely include the more than $1 billion he earned when Nikola went public in June 2020.

Prosecutors said Milton “was motivated to engage in the fraudulent scheme in order to enrich himself and elevate his stature as an entrepreneur.”

A spokesman for Milton didn’t immediately comment on the indictment.

Nikola said in an emailed statement that it’s “cooperated with the government throughout the course of its inquiry.” The company emphasized that the allegations are against Milton and not the company itself.

“We remain committed to our previously announced milestones and timelines and are focused on delivering Nikola Tre battery-electric trucks later this year from the company’s manufacturing facilities,” the company said.

Many of the allegations regarding false and misleading statements were first uncovered by short-seller Hindenburg Research in September.

Hindenburg accused Milton of making false statements about Nikola’s technology in order to grow the company and partner with auto companies. The report, titled “Nikola: How to Parlay An Ocean of Lies Into a Partnership With the Largest Auto OEM in America,” was released two days after the company announced a deal with General Motors that sent both companies’ shares soaring. It characterized Nikola as an “intricate fraud built on dozens of lies” by Milton.

Following an internal investigation, Nikola in February said it found Milton made several inaccurate statements from 2016 through the company’s IPO last year that misled investors.

This is breaking news. Please check back for updates.



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