The SEC Gets Involved With Nikola
Nikola Corporation's (NASDAQ: NKLA) wild week has reached the ears of the SEC.
What Happened: After Monday's closing bell, Bloomberg reported the U.S. Securities and Exchange Commission is examining Nikola "to assess the merits of a short-seller's allegations that the electric-truck maker deceived investors about its business prospects, according to people familiar with the matter."
On Sept. 10, Hindenburg Research released a report accusing the company of being “an intricate fraud built on dozens of lies.”
Why It's Important: Nikola's stock has taken a big hit in recent trading sessions.
See Also: Nikola Short Sellers Pocket $51M On Hindenburg Sell-Off
“The remarkable thing about Nikola’s story is not that someone like [CEO] Trevor Milton exists, but that he has managed to parlay his stories and lies into deals with some of the best manufacturers and partners in the world by claiming to own vast proprietary technology and having successfully built revolutionary products that simply didn’t exist,” Hindenburg said.
Milton was quick to defend himself that day, tweeting, "I guess everything is fair game in war, even a hit job...This is all you got?"
Nikola issued a more detailed response on Monday morning, saying the short report "was designed to provide a false impression to investors and to negatively manipulate the market in order to financially benefit short sellers."
What's Next: Nikola fell about $20 a share last week. The stock bounced back in Monday's session, closing at $35.79, an 11.4% gain. Shares were down more than 10% in after-hours trading at the time of publication.
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