Nikola Founder Trevor Milton Resigns Sending Shares Lower

Shares of Nikola, which designs and manufactures electric components, drivetrains and vehicles, saw its shares head lower this week after company founder Trevor Milton resigned.

The company saw a drop of roughly 30% in premarket trading on Monday after founder and Executive Chairman Trevor Milton stepped down. The stock was trading at its lowest price since going public on June 4th.

Stephen Girsky, a former vice chairman of General Motors and a member of Nikola’s board, has been appointed chairman of the board, effective immediately.

Wedbush Securities’ Daniel Ives described Milton’s departure as “a gut punch” and a “white knuckle period for Nikola bulls.”

“It’s a dark day for Nikola. Let’s just call it like it is. Trevor leaving, he’s a key part of the vision,” he said on CNBC’s “Squawk Box” on Monday. “That’s something investors have sort of bet on … I still believe there’s a story here, especially for GM.”

Recently short seller Hindenburg Research had accused Milton of making false statements about the company’s technology.

A report entitled “Nikola: How to Parlay an Ocean of Lies Into a Partnership With the Largest Auto OEM in America,” characterized Nikola as an “intricate fraud built on dozens of lies” by Milton.
The report had been released two days after the company announced a deal with GM. Shares of GM were down 7% in morning trading on Monday.

The Securities and Exchange Commission and Department of Justice are reportedly looking into Hindenburg’s claims.

GM released a statement and said, “work with Nikola to close the transaction we announced nearly two weeks ago to seize the growth opportunities in broader markets” with its battery electric and fuel cell technologies.

“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,” the company said. “Our overall goal is to put everyone in an EV and accelerate adoption.”

“Ever since Nikola started trading, I told you there was too much hype and not enough substance to this one,” said Jim Cramer, the host of “Mad Money.”

“Even though the stock bounced today on the Milton resignation, I don’t like it,” the “Mad Money” host said on Tuesday’s gains. “Ever since Nikola started trading, I told you there was much too much hype and not enough substance to this one.”

The stock ended Tuesday’s session up 3.4% at $28.51 per share.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.