Nikola Shares Slump Amid SEC Probe Into Short Seller Hindenburg Fraud Claims

Nikola said it welcomes the SEC investigation into claims of fraud levied by short-seller Hindenburg research, which have loped billions from the electric truck maker's market value since late last week.
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Nikola Corp.  (NKLA) - Get Report shares traded lower again Tuesday following reports that the U.S. Securities and Exchange Commission is probing group following allegations of fraud levied by noted short seller Hindenburg Research.

Nikola confirmed the SEC investigation, first reported by Bloomberg, in an emailed comment to TheStreet late Monday following a round of back-and-forth statements between the Phoenix, Arizona-based tech truck maker and Hindenburg analysts.    

The volley of statements following a Thursday report from  Hindenburg. which said it had collected data from phone calls, text messages and emails that detail dozens of false statements from the company's founder and CEO Trevor Milton, sending the group's shares 25% lower over the next two sessions session and loping more than $5 billion from its market value.

“On September 11, Nikola’s legal counsel proactively contacted and briefed the U.S. Securities and Exchange Commission (SEC) regarding Nikola’s concerns pertaining to the Hindenburg report," the company said to TheStreet. "Nikola welcomes the SEC’s involvement in this matter.”

Nikola shares were marked 4.7% lower in early trading Tuesday to change hands at $34.12 each and a market value of around $13 billion. Nikola went public on June 4 following a reverse merger with VectoIQ, a publicly-traded special purpose acquisition company, or SPAC.

General Motors  (GM) - Get Report CEO Mary Barra, who unveiled a lucrative joint venture with Nikola last week, told an industry conference Monday that questions regarding the issues raised in the Hindenburg report should be put directly to the company, but added that the carmaker performed a “thorough review of business, legal and technical matters” before inking its deal.

Hindenburg's note last week described Nikola as a "an intricate fraud built on dozens of lies", while also claiming that CEO Milton hyped his company's battery technology after becoming aware of issues related to a planned acquisition in October of last year.

Nikola said it has been vetted by some of the biggest names in the auto and industrial sector, including Germany's Bosch,  and insisted its Tre semi-truck, which is being produced in conjunction with Europe's IVECO, will be available by the fourth quarter of next year, around the same time it will be testing a pre-production Nikola Two, a hydrogen-electric powered semi-truck for the medium and long-haul trucking sectors.