Nikola’s founder and executive chairman has stepped down from his position, following which the hydrogen-electric truck start-up’s shares plummeted to new lows. This news has come in barely two weeks after a shocking report from a financial analysis firm Hindenburg Research, accusing the start-up of being an “intricate fraud.”
Mark Russel and Stephen Girsky to succeed Nikola’s founder Trevor Milton
Milton also released a letter stating his experience of building Milton. He also recapitulated that he approached the company’s board of directors for his voluntary resignation. He further said he would be succeeded by Nikola’s CEO, Mark Russell, who will remain in his position.
Stephen Girsky, former vice chairman of General Motors will succeed Milton as Nikola’s chairman. Both Russell and Girsky stated that they would work together to execute goals and become a zero-emissions transportation solutions provider. Post Milton’s news, Nikola’s shares dropped 28% in premarket trading, though it recovered a little later in the day to a 19% loss.
Hindenberg Research accuses the hydrogen-electric truck start-up of fraud
It released its report on September 10, accusing Nikola of being a fraud and misleading partners about its technology. It caused both the US Securities and Exchange Commission and the Department of Justice to start investigations. Nikola has countered these claims as false and deceptive.
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This report was released two days after Nikola and General Motors announced a partnership, giving GM a $2 billion stake or an 11% of Nikola. It is in exchange for assisting the start-up in building the Badger electric-pickup truck.
General Motors confirms to stand by Nikola as they work to close this deal
GM confirmed that it would stand by Nikola, and it plans to work towards closing this deal, which is a part of the EV strategy. Their CEO Mary Barra said that they performed the due diligence before entering into this deal. As GM defended their partnership, Nikola bought an additional 41,400 shares, increasing its stake to 91.6 million shares, or 25% of the company.
Milton has promised to defend the company against the report’s allegations although as a counter to this report, Nikola admitted that its first semi-truck, the One, never ran on its power. Milton assured the reporters at the One’s launch that the truck was not a pusher.