Nikola (NKLA) founder and executive chairman Trevor Milton is out of the company after his deception has been exposed and the company is starting to feel the pressure from all sides.
As we have been reporting over the last few weeks, Nikola is currently in hot water after a recent report from Hindenburg Research made several allegations exposing deception by Nikola and its founder Trevor Milton, including several claims corroborated in previous reports from Electrek and Bloomberg.
Last week, Nikola issued a response to those claims, but as we reported, the response lacked any rebuttal of the main allegations of deception by the company and its founder Trevor Milton.
For the most damning one, the claim that they faked the first video of their hydrogen truck driving, the company even admitted to it without issuing an apology, and instead, they claimed their deception was fine due to a technicality.
Now the company announced today Milton is leaving the company effective immediately:
“Nikola Corporation (NASDAQ: NKLA) today announced that Trevor Milton approached the Board of Directors and proposed to voluntarily step aside as Executive Chairman and from the Board. The Board accepted his proposal, and Stephen Girsky, former Vice Chairman of General Motors Co. and a member of Nikola’s Board, has been appointed Chairman of the Board, effective immediately.”
Milton still owns about 20% of Nikola’s shares worth around $2 billion.
However, Nikola’s stock price is down more than 25% in pre-market trading following the news that Milton is out. Update: 20% down an $over $2B in market cap erased.
Nikola is also reportedly facing probes from the SEC and the DOJ regarding their pattern of deception that is coming to light.
Just 2 weeks ago, GM’s CEO Mary Barra and Nikola’s Trevor Milton held a joint press conference where they announced a $2B partnership where GM would take 11% of the startup. We asked GM if any of the recent news would affect their decision.
Update: GM Statement on Departure of Trevor Milton from Nikola
We acknowledge Trevor Milton’s departure from Nikola and the decision of the Nikola Board to move forward. We will work with Nikola to close the transaction we announced nearly two weeks ago to seize the growth opportunities in broader markets with our Hydrotec fuel cell and Ultium battery systems, and to engineer and build the Nikola Badger. Nikola, Honda and other companies who are looking to GM’s technology as a platform for their products, represent just one part of our overall EV strategy. Our overall goal is to put everyone in an EV and accelerate adoption.
The official story is that Milton was asked to be removed. We know that “stepping down voluntarily” is often something employed to save face when executives in these situations have been forced out.
In this case, I wouldn’t be surprised if Milton is trying to jump ship and fill his pockets in the process.
While he still owns over 5% of the company and will have to report his quarterly ownership in Nikola, he might not have to report his transactions as they happen now that he is not an active officer and “insider” anymore.
I wouldn’t be surprised if he starts unloading his position and without having to report his sales of the stock, that would make it a lot easier.
Hopefully, the SEC and DOJ are going to be able to get most of that money back at some point.
As for Nikola, I personally think that the hit to their reputation is too big to recover from at this early point in the company that still hasn’t delivered anything.
Why would anyone buy a vehicle from them now knowing that the whole company started based on a web of lies?
But either way, it should be an interesting situation to follow in the coming months.
Hopefully, the Nikola story doesn’t negatively impact investments in clean technology.
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