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‘Intricate fraud’ : Market darling Nikola examined over short seller’s claim it deceived investors

Nikola has encouraged the SEC to get involved. As its stock tumbled last week after the release of the short seller report, the company said it reached out to the SEC to discuss its issues with the Hindenburg report, and ultimately held a call with agency officials on the morning of September 11. Nikola says Hindenburg is attempting to profit from a “manufactured decline” in its share price.

“Nikola has contacted and briefed the US Securities and Exchange Commission regarding Nikola’s concerns pertaining to the Hindenburg report,” the company said in a Monday statement. “Nikola intends to fully cooperate with the SEC regarding its inquiry into these matters.”

SEC spokeswoman Judith Burns declined to comment.

Hindenburg Founder Nathan Anderson said in a statement that he’s “encouraged that regulators are examining the situation.”

Hindenburg has a short position in Nikola shares and stands to benefit if the shares fall. Among Hindenburg’s accusations is that a 2018 promotional video was misleading because it gave the impression that a prototype was capable of being driven when the truck had in fact been rolled down a hill.

Nikola said Monday it never claimed the truck was driving under its own propulsion – though it had described the vehicle as “in motion” in social media posts and other communications.

Nikola has recorded no meaningful revenue to date, yet its shares rose to almost $US80 a share in June, giving it a market valuation greater than Ford's.

Nikola has recorded no meaningful revenue to date, yet its shares rose to almost $US80 a share in June, giving it a market valuation greater than Ford’s.Credit:

Nikola was little-known before it went public earlier this year through a reverse merger with a blank-cheque company. The company has recorded no meaningful revenue to date, yet its shares rose to almost $US80 a share in June, giving it a market valuation greater than Ford’s. After the short seller report came out, shares of Nikola wiped out all the gains since going public.

Nikola plans to start production of a battery-electric semi truck in Ulm, Germany, in a joint venture with CNH Industrial’s Iveco unit by the end of 2021. It also has a factory under construction in Coolidge, Arizona, where it hopes to begin mass production of fuel-cell semi trucks by 2023. However, it has yet to build any products.

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