Nikola Motor Company Badger pickup truck

Source: Nikola Motor Company

Nikola shares tumbled more than 10% on Friday after the electric vehicle company dismissed fraud allegations made in a report by short selling firm Hindenburg Research.

Nikola said it is considering legal options, retaining Kirkland & Ellis, and that it plans to bring documents to the Security and Exchange Commission to rebut the report.

The accusations come just days after General Motors said it is taking an 11% stake in Nikola and that it will produce its marquee hydrogen fuel cell electric pickup truck the Badger by the end of 2022. GM shares were up 0.9% in morning trading.

“We are fully confident in the value we will create by working together,” GM said in a statement. “We stand by the statements we made in announcing the relationship.”

Nikola shares are up more than 200% so far this year.

Hindenburg accused Nikola’s founder, Trevor Milton, of making false statements about the company’s technology in order to grow and partner with top automakers.

“To be clear, this was not a research report and it is not accurate,” Nikola said in a statement Friday. “This was a hit job for short sale profit driven by greed.”

Hindenburg said it has evidence including phone call recordings and text messages containing false statements and that the company staged a video showing a truck that appeared to be functional. The research firm said the truck was rather “towed to the top of a hill on a remote stretch of road and simply filmed it rolling down the hill.”

The firm said Nikola’s response didn’t address any of its more than 50 questions “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,” it said.

Read Nikola’s full statement here:

“Yesterday, an activist short-seller whose motivation is to manipulate the market and profit from a manufactured decline in our stock
price published a so-called “report” replete with misleading information and salacious accusations directed at our founder and executive chairman. To be clear, this was not a research report and it is not accurate. This was a hit job for short sale profit
driven by greed.

We have nothing to hide and we will refute these allegations. They have already taken up more time and attention than they deserve. We
have retained leading law firm Kirkland & Ellis LLP to evaluate potential legal recourse, including with respect to the activist short seller and any others acting in concert.

Nikola also intends to bring the actions of the activist short-seller, together with evidence and documentation, to the attention of the
U.S. Securities and Exchange Commission

We respect the rights of investors and the integrity of the market and will be back to you after we have advanced the process with the
SEC.

Most importantly, Nikola remains focused on delivering on the promises we’ve made to our stakeholders.”

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