Nikola threatens Hindenburg with litigation, short-seller 'welcomes it'

By Akanksha Rana and Munsif Vengattil (Reuters) - Nikola Corp said on Friday it could take legal action against Hindenburg Research, a day after the short-seller issued a scathing report accusing the electric truck maker of being a 'fraud'. Hindenburg had shorted the stock on Thursday and said it had gathered enough evidence to show that Nikola founder Trevor Milton made false statements about possessing proprietary technology to form partnerships with large automakers.

Reuters September 12, 2020 00:06:28 IST
Nikola threatens Hindenburg with litigation, short-seller 'welcomes it'

Nikola threatens Hindenburg with litigation shortseller welcomes it

By Akanksha Rana and Munsif Vengattil

(Reuters) - Nikola Corp said on Friday it could take legal action against Hindenburg Research, a day after the short-seller issued a scathing report accusing the electric truck maker of being a "fraud".

Hindenburg had shorted the stock on Thursday and said it had gathered enough evidence to show that Nikola founder Trevor Milton made false statements about possessing proprietary technology to form partnerships with large automakers. The short-seller also accused Milton of nepotism.

"To be clear, this was not a research report and it is not accurate. This was a hit job for short sale profit driven by greed," Nikola said in a statement. "We have nothing to hide and we will refute these allegations."

The Phoenix-based company said it intended to bring the actions of the activist short-seller, along with evidence and documentation, to the attention of the U.S. Securities and Exchange Commission.

Hindenburg founder Nathan Anderson said in a statement on Friday that his firm would welcome a lawsuit by Nikola.

"The company answered none of the 53 questions we raised in our report after promising a full rebuttal," he said.

"We are pleased that Nikola is engaging with the SEC and we are not surprised that Trevor Milton is not commenting further on advice of counsel."

Milton tweeted on Friday that Hindenburg's questions are "easy to comment on", and he will release a detailed response soon.

Nikola said it had hired law firm Kirkland & Ellis to evaluate its options.

PEER SUPPORT

Hindenburg's report garnered support from other short sellers including Muddy Waters and Citron Research.

"Congrats to Hindenburg for exposing what appears to be a total fraud with $NKLA," Citron tweeted, adding that the short seller will cover half of all legal expenses for Hindenburg. (https://bit.ly/3hlknn3)

Nikola's shares were last down more than 15%, after closing down 11% on Thursday. The stock has nearly erased all the gains since Nikola announced a partnership earlier this week with General Motors, which took an 11% stake in the company.

Nikola has said that it had been "vetted by some of the world's most credible companies and investors."

Milton on Friday shared some pictures of work in progress at a company facility in Germany.

GM said on Thursday after the Hindenburg report was released that it stood by the comments it had made in announcing the alliance and it was "fully confident" in Nikola.

(Reporting by Akanksha Rana and Munsif Vengattil in Bengaluru; additional reporting by Ben Klayman in Detroit; Editing by Vinay Dwivedi, Steve Orlofsky and Sriraj Kalluvila)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.