Nikola Threatens To Sue Hindenburg Research For Fraud Accusations
14 September 2020 - insideEVs
Could there be a better name for someone trying to burn down a hydrogen company?
If you skipped September 10 news, you probably did not hear about Hindenburg. Not the airship filled with hydrogen that killed 37 people in 1937, but the financial research company that claimed Nikola Motor Company was a fraud. Trevor Milton and the company immediately reacted and promised to address every single accusation. Still, it only threatened to sue Hindenburg Research and downplayed the document as "not a research report."
Milton promised all the answers would be out before the market opened after he and his company worked on the for 14 hours, as the tweet below shows:
Been working on rebuttal of hindenburg for 14 hours to provide a clear, factual, low-emotional answer to the report. It will be out before market opens and working through the night. I feel great about every answer. They wanted max damage, it didn't work. Now back to growth.
Curiously, this is the most recent tweet to appear at Trevor Milton's Twitter profile. All others seem to have been deleted back to June 2. Milton is a very active person on Twitter, which makes us wonder why he and his team decided to erase or hide these tweets.
As we already said, the first document Nikola provided addressed none of the accusations made by Hinderburg Research. It just mentions it is "replete with misleading information and salacious accusations directed at our founder and executive chairman."
Something else the press release says is that Hindenburg's document "was not a research report, and it is not accurate. This was a hit job for short-sale profit driven by greed," according to the Nikola Motor Company's PR department.
A little further, Nikola mentions it is working with "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." It also promises to bring Hindenburg Research's actions to the attention of the US SEC (Securities and Exchange Commission).
Hindenburg accuses Nikola of "falsely claiming to have extensive proprietary technology." When it announced its deal with GM, the company said the Badger would use Ultium batteries and Hydrotec fuel cell technology, both of which will be provided by GM.
In November 2019, Nikola promised it would reveal a revolutionary new battery with 500 Wh/kg that is 50 percent cheaper than current lithium-ion cells. Hindenburg says this technology would come from the "pending acquisition" of ZapGo that was called off when Nikola realized it was vaporware. The president of this company, Charles Resnick, would have conned NASA for funding and used the money to hire prostitutes.
Hindenburg also accuses Nikola of not having a running prototype of any of its vehicles, and of hiring Trevor Milton's brother, Travis, to be ist "Director of Hydrogen Production/Infrastructure." The financial research company says Travis's experience is limited to "pouring concrete driveways and doing subcontractor work on home renovations in Hawaii."
So far, GM seems to be supportive of the company and said it is "fully confident in the value we will create by working together" with Nikola, according to Reuters. However, the list of accusations is extensive and seemingly based on documents, pictures, and other pieces of evidence.
If Nikola wants to save its reputation – and despite how extensive the accusations are – it would better answer to the financial report point by point as soon as possible. Otherwise, the damages Hindenburg may cause will make the 1937 airship wreck look irrelevant in comparison.