Nikola Offers 5 Paragraph Response To Yesterday’s Hindenburg Research Report, Threatens Legal Action

Nikola Offers 5 Paragraph Response To Yesterday’s Hindenburg Research Report, Threatens Legal Action

Tyler Durden

Fri, 09/11/2020 – 08:57

Update 9/11/2020 0846AM EST: Nikola has published a brief response to yesterday’s almost 100 page report by Hindenburg Research on Friday morning. A press release, which does not debunk individual points of the report, simply says the company will refute allegations, then mentions that Nikola hired a law firm and will bring the actions of the short seller to the SEC:

“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.”

Headlines started hitting the wire on Friday morning: 

  • NIKOLA SAYS SHORT SELLER REPORT IS NOT ACCURATE
  • NIKOLA SAYS MAY TAKE LEGAL ACTION, WILL BRING TO SEC ATTENTION
  • NIKOLA RESPONDS TO SHORT SELLER REPORT BY HINDENBURG
  • NIKOLA: ‘NOTHING TO HIDE’, REFUTES ALLEGATIONS

Nikola did not appear to answer any of the 53 questions that Hindenburg Research posed at the bottom of its report that was issued on Thursday morning. Some in the industry did not seem to be won over by the company’s response:

Headline of press release says Nikola refutes allegations, then body of release says Nikola *will* refute allegations. https://t.co/jg1jK8zfgI

— Charley Grant (@CGrantWSJ) September 11, 2020

One short seller even had it pinned yesterday…

Executive summary of $NKLA‘s upcoming refutation of the Hindenburg piece:

“Of COURSE they said those things- they’re SHORT-SELLERS! ‘Short and distort’ is a well-known technique they use. We will not lower ourselves to their low level by confronting the specific allegations.”

— Mark B. Spiegel (@markbspiegel) September 10, 2020

Update 9/10/2020 0939AM EST: Nikola’s CEO has responded on Twitter, saying he “needs a few hours” to respond to the report. 

It makes sense. Tens of millions of shares shorted the last day or two to slam our stock and hit job by hindenburg. I guess everything is fair game in war, even a hit job. I know who funded it now. Give me a few hours to put together responses to their lies. This is all you got?

— Trevor Milton (@nikolatrevor) September 10, 2020

Nikola shares are selling off pre-market in response to a new report from Hindenburg Research, which calls it an “intricate fraud” based on conversations with former employees.

“Today, we reveal why we believe Nikola is an intricate fraud built on dozens of lies over the course of its Founder and Executive Chairman Trevor Milton’s career,” the report claims.

“We have gathered extensive evidence—including recorded phone calls, text messages, private emails and behind-the-scenes photographs—detailing dozens of false statements by Nikola Founder Trevor Milton. We have never seen this level of deception at a public company, especially of this size.”

The report was followed by Tweets that appear to show various types of deception from the company. For example, one Tweet claims that Nikola’s “One” semi truck was just rolling down a hill in a video where the company claimed it was “in motion.

Our investigation of the site and text messages from a former employee reveal that the video was an elaborate ruse— $NKLA had the truck towed to the top of a hill on a remote stretch of road and simply filmed it rolling down the hill. pic.twitter.com/n2NLDGInzR

— Hindenburg Research (@HindenburgRes) September 10, 2020

Similar claims seem to show that the Nikola One was not powered on its own during its 2016 reveal, previously called into question by Bloomberg several months. Rather, the report notes there was 

The report calls the reveal a “total farce”.

We present behind-the-scenes photos showing that $NKLA had an electricity cable snaked up from underneath the stage into the truck in order to falsely claim the Nikola One’s electrical systems functioned. pic.twitter.com/mVhGuwrMtg

— Hindenburg Research (@HindenburgRes) September 10, 2020

Additionally, the report points out that inverters claimed to be made in-house from Nikola appear to have been bought from another company, with pieces of masking tape covering up their logo.

The masking tape covers the inverter’s label, which would have made it clear who actually developed the component.

We asked Cascadia whether the part was custom-built or open to the public, and they confirmed it is generally available. pic.twitter.com/CQJ0CPUBIP

— Hindenburg Research (@HindenburgRes) September 10, 2020

The report also questions some key hires at Nikola.

The masking tape covers the inverter’s label, which would have made it clear who actually developed the component.

We asked Cascadia whether the part was custom-built or open to the public, and they confirmed it is generally available. pic.twitter.com/CQJ0CPUBIP

— Hindenburg Research (@HindenburgRes) September 10, 2020

And calls into question the company’s supposed battery technology. 

….and (b) the President of the battery company was indicted months earlier over allegations that he conned NASA by using his expense account to procure numerous prostitutes. pic.twitter.com/nAt5QltTIw

— Hindenburg Research (@HindenburgRes) September 10, 2020

The report comes just days after Nikola inked a partnership with General Motors, wherein GM would be supplying Nikola with fuel cells and production capacity – leaving many to wonder what, if anything Nikola was bringing to the deal. We imagine those skeptics will want to dig through this morning’s report.

You can read the entire report here.

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