Nikola slumps after founder Trevor Milton charged with lying to investors

2021-07-30 03:43:00 AM

Shares of the EV start-up crash about 10% after charges filed against Milton for false and misleading statements

29 July 2021 - 16:33Chris Dolmetsch and Ed LudlowNikola founder Trevor Milton. Picture: REUTERS/MASSIMO PINCANikola founder and former executive chair Trevor Milton has been charged by prosecutors with making false statements to investors in the electric-vehicle (EV) start-up. The company’s shares fell the most in almost five months.

Gospel queen Winnie Mashaba axes husband after 16 years | Citypress Actor Loyiso MacDonald’s wife applies for divorce | Citypress Industrialise, says Finance Minister Godogwana | Citypress

Milton, who  stepped down from the company in 2020, is in federal custody after voluntarily surrendering. He’s charged with misleading investors from November 2019 until about September 2020 about the development of Nikola’s products and technology, according to an indictment unsealed on Thursday by federal prosecutors in New York, the US. 

The Securities and Exchange Commission (SEC) also filed a complaint against him.Representatives for Milton couldn’t be reached immediately. Nikola said in a statement that has co-operated with the investigation and reiterated its commitment to start vehicle production. headtopics.com

“Today’s government actions are against Mr Milton individually, and not against the company,” the company said.Shares of the EV start-up fell as much as 11% on Thursday, touching the lowest intraday level since March 5. The stock was down 9.6% to $12.83 in New York before the close. 

Shrinking valuationNikola’s market capitalisation has plunged from almost $29bn in June 2020 to about $5bn now. Milton is the company’s largest shareholder with about a 20% stake in Nikola, according to data compiled by Bloomberg.Nikola went public through a reverse merger with a blank-cheque company  in June 2020, a deal made Milton into an overnight billionaire. At one point, the company’s shares ballooned to almost $80 apiece, giving it a market capitalisation greater than Ford Motor despite not generating any meaningful revenue.

Days after the start-up’s shares debuted, Bloomberg News reported that Milton had exaggerated the capability of the company’s debut truck, the Nikola One. That story got the attention of an activist investor at Hindenburg Research, which published a detailed report in September accusing Milton and Nikola of deceiving investors.

 The claims Nikola’s founder made about that early vehicle were among those highlighted in the SEC’s complaint.“Milton sold a version of Nikola not as it was — an early stage company with a novel idea to commercialise yet-to-be proven products and technology — but rather as a trailblazing company that had already achieved many groundbreaking and game-changing milestones,” according to the complaint. headtopics.com

40% of wastewater treatment plants don't work, putting pressure on already stretched supply | News24 Merkel makes final push for successor in Germany's knife-edge polls India to export 8 million Covid-19 jabs in October

Deal falloutThe fallout from the accusations has forced Nikola to curtail its ambitions after setbacks such as a much-diminished deal with General Motors and the cancellation of an electric-powered rubbish truck programme with Republic Services. 

Nikola initially denied the claims by Hindenburg, which was betting against its shares. But Milton resigned later that month, and in February the company said an internal review of claims about its technology concluded the start-up and its founder made several “inaccurate statements”.

Among the false and misleading statements Milton made, according to the indictment:That the company had a “fully functioning” semi-truck prototype known as the Nikola One, though Milton knew that the prototype was inoperable.That Nikola had engineered and built an electric- and hydrogen-powered truck known as the Badger from the “ground up” using Nikola’s parts and technology, which he knew was not true.

That Nikola was producing hydrogen and was doing so at a reduced cost, when “no hydrogen was being produced at all by Nikola, at any cost”.That Nikola had developed batteries and other important components in-house, when they were buying them from third parties. headtopics.com

That reservations for Nikola’s semi-trucks were binding orders representing billions in revenue, when they were actually able to be cancelled at any time “and were for a truck Nikola had no intent to produce in the near-term”. Read more: Business Day »

eNCA Entrepreneurship Friday | 17 September 2021

From doing fresh fades on his stoep to opening his 50th store. Legends Barbershop was started in 2011 but its growth in the market took off in 2014.\u003Cbr /\u003E\r\nSheldon Tatchell took a stab in starting the country’s most talked-about barbershop. And what\u0026#039;s great is that he has not kept his talent to himself.\u003Cbr /\u003E\r\nLegends has a training platform for budding barbers looking to enter the industry.

Jeff Bezos gives millions to renowned chef José Andrés for ‘courage and civility’In a press conference following his 11-minute Blue Origin flight, the Amazon founder announced a $100-million award to the renowned chef and co-founder of World Central Kitchen, José Andrés. I saw several people testifying of making so much money with the help of shantelll_142 on Bitcoin option trade and I decided to give a try and now I'm glad now she helped me and my colleagues to make R40,000 in one week, thank you for transparency and trust.

JSE firmer ahead of US Fed committee’s reportInvestors await comments from chair Jerome Powell, who has been less dovish recently

Slipknot co-founder Joey Jordison, 46, dies | ChannelJoey Jordison, the co-founder of Slipknot and one of the most influential metal drummers of his generation, has died at the age of 46, his family announced.

'Die Kliek': TV and online dating collide in new series'Die Kliek': TV and online dating collide in new series Schalk Bezuidenhout is hosting 'Die Kliek', a dating show where girls are in charge. Muhammad Qasim, a muslim and ummati of Prophet Muhammad SAW, has seen divine dreams for the future of Muslim ummah and the events to come. Many of his dreams are coming true. Learn more at - or search 'Muhammad Qasim Dreams' I'm happy to join those who are sharing the good news about shantelll_142 . I'm not persuading anyone to trade with her but i advise every investor to make the right choice with shantelll_142 i got my withdrawal safely without any interruption.

Newsdeck: Zuckerberg Says Facebook’s Future Lies in Virtual ‘Metaverse’(Bloomberg) --Mark Zuckerberg doesn’t just want you logging in to his company’s products. He wants you living, working and even exercising inside them.

Five things funeral directors can do to help grieving families respect Covid-19 protocols during funeralsCo-founder and CEO of Abaveleli Funeral Directors, Unathi Saul, said many bereaved families have fear and anxiety about burying their loved ones during the Covid19 pandemic. lockdown coronavirus level3