Nikola Corp. (NKLA) - Get Report shares fell sharply Thursday after analysts at Hindenburg Research, a noted short-seller, published a note accusing the electric-truck startup of being "an intricate fraud built on dozens of lies."
Hindenburg said it has collected data from phone calls, text messages and emails that it says detail dozens of false statements from the company's founder and CEO Trevor Milton. In one instance, Hingdenburg notes, claims that Nikola's headquarters has "3.5 megawatts of solar panels on its roof producing energy" are not supported by aerial photographs of the Phoenix, Arizona site.
Hindenburg also says claims Milton hyped his company's battery technology after becoming aware of issues related to a planned acquisition in October of last year.
"Trevor has managed to parlay these false statements made over the course of a decade into a ~$20 billion public company," Hindenburg wrote. "He has inked partnerships with some of the top auto companies in the world, all desperate to catch up to Tesla and to harness the EV wave.
Hindenburg said it has taken a short position in Nikola shares.
"Nikola has been vetted by some of the world's most credible companies and investors," the company said in a statement to TheStreet. "We are on a path to success and will not waver based on a report filled with misleading information attempting to manipulate our stock."
Nikola shares were marked 11.5% lower in late Thursday trading to change hands at $37.50 each, a move that still leaves the stock with a 275% year-to-date gain and a market value of around $14.2 billion.
Earlier this week, General Motors GM said it would take an 11% stake in Nikola -- worth around $2 billion -- as it unveiled a joint venture that will see GM building the Nikola Badger, a fully-electric and hydrogen fuel cell electric pickup truck, as well as becoming the exclusive supplier of fuel cells around the world -- outside of Europe -- for Nikola's Class 7/8 trucks.
GM said Thursday it stands by statements made during its joint venture announcement, when CEO Mary Barra called Nikola "an industry leading disrupter" that would help GM make another important step in fulfilling our vision of a zero-emissions future."
GM shares were marked 2.6% lower in early Thursday trading at $31.11 each.