Trevor Milton Steps Down From Nikola, Stock Sinks [UPDATED]
It’s been a wild ride for Nikola, from being highly valued – perhaps overvalued – by Wall Street, to partnering with GM, to being accused of fraud, to founder Trevor Milton voluntarily stepping down today.
Milton, who was hailed as the next Elon Musk not long ago, is stepping aside less than two weeks after Hindenburg Research, a short-selling firm, published a long article/blog post accusing Nikola of fraud. Milton and Nikola pushed back, saying the report contained inaccuracies, but Milton is resigning as executive chairman and giving up his spot on the board anyway.
The board has accepted his resignation.
Nikola stock slipped 30 percent in pre-market trading. As I write this, around 9 am CST Monday, it’s down about 16 percent.
Ed. note: GM sent over a statement shortly after we published. It’s at the end of this post.
Stephen Girksy, a former vice chairman for GM who is on Nikola’s board, is now chairman of the board, effective immediately.
“Nikola is truly in my blood and always will be, and the focus should be on the Company and its world-changing mission, not me,” Milton said in a statement. “So I made the difficult decision to approach the Board and volunteer to step aside as Executive Chairman. Founding Nikola and growing it into a company that will change transportation for the better and help protect our world’s climate has been an incredible honor.”
He also tweeted out a statement that included a line in which he declared his intent to defend himself against the allegations. The Securities and Exchange Commission and Department of Justice are reportedly investigating claims about Nikola misleading investors.
GM, of course, recently promised to help hydrogen fuel-cell truck, the Badger, and took a stake of 11 percent in Nikola. GM CEO Mary Barra has said the company did its due diligence, but the accusations of fraud, the reported investigations, and Milton stepping aside will nonetheless raise questions about GM’s vetting process.
Nikola’s stock went from $13 in the spring to $93.99 in June, before falling to $34.19 on Friday.
Nikola CEO Mark Russell put out this statement: “Our priorities remain unchanged and, in collaboration with our partners, we are laser-focused on executing on our strategic initiatives and laying the groundwork to become a vertically integrated zero-emissions transportation solutions provider,” Russell said.
Update: GM has responded. Statement: “We acknowledge Trevor Milton’s departure from Nikola and the decision of the Nikola Board to move forward. We will work with Nikola to close the transaction we announced nearly two weeks ago to seize the growth opportunities in broader markets with our Hydrotec fuel cell and Ultium battery systems, and to engineer and build the Nikola Badger. Nikola, Honda and other companies who are looking to GM’s technology as a platform for their products, represent just one part of our overall EV strategy. Our overall goal is to put everyone in an EV and accelerate adoption.”
HotPotato on Sep 29, 2020
If you cruise over to Elektrek, you can see the Tesla fanboiz crowing over this. They should be careful what they wish for in terms of enthusiastic enforcement. Milton may well have stretched the truth to the point of fraud. But Musk's "full self driving computer" and promise of a fleet of autonomous robotaxis seem to me like they're doing the same thing. People are paying $6000 for this computer on the insinuation that it does more than it currently can, and the promise that it will eventually do more than it likely ever will (i.e., be government-approved for fully autonomous use despite lacking lidar and maps, and generate passive income for the owner by letting them use their car as a robotaxi). I wish Tesla well, and maybe this is sincere wishful thinking on their part and not something worse, but...oof.
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