Shares of Nikola Tumble on Alleged CEO Exaggerations

Electric truck company Nikola saw its shares fall this week after a report revealed that the company’s chief executive exaggerated capabilities of a prototype that was displayed in 2016.

According to Bloomberg News, Nikola CEO Trevor Milton suggested at a 2016 event that a prototype big-rig “fully functions and works,” but anonymous sources said that it did not have a fuel cell nor other parts that would have allowed it to be operable.

As per the Bloomberg article:

Milton then made several comments to the crowd at the December 2016 event suggesting the Nikola One was driveable. The statements alarmed people familiar with the truck’s capability, who told Bloomberg News recently that it was inoperable and missing key components to power itself. On Wednesday, Milton said key parts were taken out of the vehicle for safety reasons and that it never drove under its own power.”

At the event 3 1/2 years ago, Milton said the company had put up a chain to keep people from bumping into any of the vehicle controls. “We’re going to try to keep people from driving off,” he said. “This thing fully functions and works.”

Later, he said the truck was not a “pusher,” referring to an inoperable prototype that needed to be nudged onto the stage.

The people familiar with the truck, who asked not to be identified discussing sensitive information, said they were concerned about the statements. Gears and motors were missing, and while the words “H2 Zero Emission Hydrogen Electric” were emblazoned on the vehicle, there was no fuel cell on board.

“There wasn’t a fuel cell in the truck. We never claimed there was,” Milton said. He confirmed the motors and gears weren’t in the vehicle for safety reasons.”
“I never deceived anyone,” Milton told Bloomberg.

At the time of the Nikola One unveiling, MIlton said that deliveries of the truck would begin this year however the company says it expects no revenue this year.

Milton wrote in several tweets, “This is sad. @EdLudlow should be let go. He will never set foot in my building or events Nikola puts on. No one in Bloomberg either .His editor was even on the phone to hear my responses. Release the whole interview since it was recorded. People will see you for the deceiver you are.”

“Everyone at the event knew we didn’t drive it because it wasnt safe, although it could be driven if we wanted to with safety and time put into it without the fuel cell. The truck built could have been driven w/ testing. He ruined Bloomberg good name. I dont back down and happy to take this fight on. The funny part is, he won’t hurt me. He hurt himself for this hack job of an article. There were “no gears and motors missing” you jackjob. They were sitting on the tables to show the audience in person. Why would we have them in the truck if weren’t going to drive it? You blew any chance of any interview again.”
“This is when you get sued. He did validate the bad information he got. he never interviewed the crowd who came, the engineers who work here and he intentionally did not report the truth from my interview this morning. You can lie but you will held accountable.”

Nikola recently went public through a special acquisition company, or SPAC. In the last month shares have skyrocketed nearly 200%.

Disclaimer: We have no position in Nikola Corporation (NASDAQ: NKLA) and have not been compensated for this article.