GM Considers MORE Nikola Stock?
General Motors is understandably considering revisions to its deal with Nikola Corp following the recent hullabaloo that tanked the startup’s stock. Allegations had surfaced that founder Trevor Milton had misled investors by promising technologies that did not yet exist, forcing him to leave Nikola’s ranks right around the time the Securities and Exchange Commission decided to get involved.
Obviously, critics said this made GM look as though it was run by morons. Last month, the Detroit automaker agreed to take an 11 percent stake in Nikola while also planning to build its all-electric Badger pickup and sharing its hydrogen tech to help spur development. But it seems as though this was being done on little more than Milton’s word that Nikola was the real deal. General Motors does not appear to have done its due diligence in vetting the company’s true capabilities. While the obvious remedy would seem to be to distance itself from the now-tainted brand, GM is actually rumored to be considering expanding its interests in Nikola now that its share price has declined.
From Bloomberg:
Since the deal was announced on Sept. 8, Nikola stock has fallen by more than half and GM has sought better terms before closing, said the people, who asked not to be identified because the discussions are private. GM could push to raise its equity in Nikola beyond the planned 11 [percent] or seek warrants that would guarantee or even increase that level of ownership if the company raises more money.
GM’s due diligence on the startup has been questioned after a short seller accused Nikola of overstating its capabilities and know-how. The allegations — and federal regulatory probes into those claims — sent the Phoenix-based company’s stock price into a downward spiral. Nikola has denied the allegations against it and Trevor Milton, the company’s founder and former chairman.
The SEC has since gotten involved, which short-seller Hindenburg said was a great idea after it successfully impacted Nikola’s stock. While its ultimate goal was to expose the company for its alleged deception, Hindenburg said it had hoped to profit from the actions taken. Meanwhile, Nikola doesn’t seem all that perturbed that it will be placed under a microscope.
“Nikola has contacted and briefed the U.S. Securities and Exchange Commission regarding Nikola’s concerns pertaining to the Hindenburg report,” the company said last month. “Nikola intends to fully cooperate with the SEC regarding its inquiry into these matters.”
Meanwhile, Nikola named Steve Shindler to its board on Thursday as a replacement for Lonnie Stalsberg this week. Shindler has served as the managing partner of VectoIQ LLC, the acquisitions company that arranged for Nikola to go public through a reverse merger, through June of 2020. Interestingly, VectoIQ was run by Stephen Girsk — a former vice chairman of General Motors who now serves as the chair of Nikola’s board. He runs several “emerging technology” firms, was instrumental in helping broker the partnership between the two companies, and presumably has some idea why GM was so keen to get a piece of the action.
[Image: Phil K/Shutterstock]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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Getting twice of nothing (Nikola stock) is still worth nothing.
GM NEVER admits mistakes, unless it is in front of a Senate Committee to save their butt. They, GM executives, are a bunch of overpaid, unqualified clowns. The GM business is in steady decline, despite "cost saving initiatives/opportunities" which screwed suppliers, customers, employees, dealers, the American people; all of it. GM cannot fix itself. Any employee who has common sense is gone from that culture through many means. The stock price proves it. GM is headed for bankruptcy #2.