14 votes

Nikola: How to parlay an ocean of lies into a partnership with the largest auto OEM in America

9 comments

  1. [5]
    Deimos
    Link
    Nikola's response: Nikola Sets the Record Straight on False and Misleading Short Seller Report
    5 votes
    1. [2]
      pallas
      Link Parent
      I'm not previously familiar with the company or this company, but is Nikola actually claiming that Hindenburg Research's claims about the Nikola One are false and misleading because, while they...

      I'm not previously familiar with the company or this company, but is Nikola actually claiming that Hindenburg Research's claims about the Nikola One are false and misleading because, while they appear to admit by exclusion that the truck was not actually functional, it was "designed" to be functional, if Nikola decided to do more work on it in the future? Or are they arguing that "functional", for a truck, does not involve it being able to be "driven by its own propulsion"?

      When they said "I don’t want someone to end up doing something and driving this truck off the stage", were they saying that they didn't want someone to come onto the stage and finish developing the truck? Or were they suggesting that everyone there knew that "this thing fully functions and works", with a video of it "in motion", and a warning of "we’re going to try to keep people from driving off" actually meant that it couldn't be driven under its own power?

      This response is rather baffling, as it doesn't seem to really even attempt to respond meaningfully to Hindenberg's claims in a believable way. Something like "the truck could have been made to work, but for safety reasons, we decided to ensure that it couldn't / decided not to have it drive on a real road" would have at least made some sense.

      6 votes
      1. Deimos
        (edited )
        Link Parent
        Yeah, I think it's funny that they even released this, because it's definitely not a response that makes them look good. The CEO probably forced it through, after he was talking up how he worked...

        Yeah, I think it's funny that they even released this, because it's definitely not a response that makes them look good. The CEO probably forced it through, after he was talking up how he worked for 14+ hours and all night rebutting the claims.

        The whole thing is basically "we didn't technically say that" or "we're confident that we'll be able to do this". I don't think they believably refuted anything with this. I especially enjoyed them admitting that they really did just roll a non-functional truck down a slope for their "in motion" video though, and trying to play it off like that wasn't deceptive:

        Nikola never stated its truck was driving under its own propulsion in the video, although the truck was designed to do just that (as described in previous point). The truck was showcased and filmed by a third party for a commercial. Nikola described this third-party video on the Company’s social media as “In Motion.” It was never described as “under its own propulsion” or “powertrain driven.”

        Nikola's stock went back up over 11% today though for some reason, but now it's dropped 8% after-hours.

        5 votes
    2. [2]
      Deimos
      Link Parent
      Hindenburg's response to the response: We View Nikola’s Response As a Tacit Admission of Securities Fraud
      1 vote
      1. Deimos
        Link Parent
        Next development: Trevor Milton, company founder and Executive Chairman resigned today. Nikola's stock dropped another 20%.

        Next development: Trevor Milton, company founder and Executive Chairman resigned today.

        Nikola's stock dropped another 20%.

        1 vote
  2. [3]
    stu2b50
    Link
    It's a good read even if you don't particularly care about the fate of Nikola. Reminds of me of all the fyre festival documentaries.

    It's a good read even if you don't particularly care about the fate of Nikola. Reminds of me of all the fyre festival documentaries.

    3 votes
    1. [2]
      onyxleopard
      Link Parent
      Is it just that in today’s world it’s that much harder for frauds to get away with this stuff indefinitely, or are there more larger frauds being perpetrated in recent history? I feel like the...

      Is it just that in today’s world it’s that much harder for frauds to get away with this stuff indefinitely, or are there more larger frauds being perpetrated in recent history? I feel like the scale of frauds has been increasing during my lifetime. Some examples off the top of my head are Kenneth Lay (Enron), Bernard Ebbers (WorldCom), Bernie Madoff, and Elizabeth Holmes (Theranos), but I’m sure there are myriad smaller frauds occurring all the time.

      3 votes
      1. cfabbro
        (edited )
        Link Parent
        I think globalization and the spread of capitalism probably has a large part to do with the scale of frauds cases going up so much in the last few decades. There is just so much more money in the...

        I think globalization and the spread of capitalism probably has a large part to do with the scale of frauds cases going up so much in the last few decades. There is just so much more money in the system than there used to be, and it's more widely dispersed amongst the masses. It used to be that if you wanted to scam huge sums from anyone you had to target the nobility, merchant or political classes, and the repercussions of being caught was potentially losing your head (or worse). Whereas nowadays the major money lies in the collective of stockholders scattered all over the world, but that are easily accessible through the exchanges... that and the repercussions of being caught committing fraud these days are only jail time and potential lawsuits.

        That's my spitball take on it, anyways. :P

        7 votes
  3. Deimos
    Link
    I read through this last night, great research and write-up. I didn't even know much about Nikola as a company at all (other than thinking it was using its name to try to hitch a ride with Tesla),...

    I read through this last night, great research and write-up. I didn't even know much about Nikola as a company at all (other than thinking it was using its name to try to hitch a ride with Tesla), but I always love reading stories like this. I definitely recommend the book "Bad Blood" about the Theranos fraud, if anyone else is into this kind of thing and hasn't already read it.

    Now it looks like Nikola is making legal threats, other short-sellers are supporting the report, and Nikola's stock is down another ~16% today.

    3 votes