Founder of GM electric truck partner quits amid allegations

[Omaha Steve]

Source: AP

By DAVID McHUGH

FRANKFURT, Germany (AP) — Shares in electric and hydrogen-powered truck startup Nikola plunged on Monday after the company’s founder resigned amid allegations of fraud - just two weeks after signing a $2 billion partnership with General Motors.

The company said late Sunday that Trevor Milton resigned and the departing executive chairman said he would defend himself against accusations that the company made false claims about its vehicles, allegations Nikola rejects.

Milton said in a message to Nikola employees that he was stepping aside because “the focus should be on the company and its world-changing mission, not me.”

Shares in the company based in Phoenix, Arizona, were off 30% in premarket trading. A report from Hindenburg Research from Sept. 10 said the company’s success was “an intricate fraud” and based on “an ocean of lies” including a video showing a truck rolling downhill to give the impression it was cruising on a highway, and stencilling the words “hydrogen electric” on the side of a vehicle that was actually powered by natural gas.



FILE - This Jan. 27, 2020, file photo shows a General Motors logo at the General Motors Detroit-Hamtramck Assembly plant in Hamtramck, Mich. Shares in electric- and hydrogen-powered truck startup Nikola plunged on Monday Sept. 21, 2020, after the company's founder Trevor Milton resigned amid allegations of fraud - just two weeks after signing a $2 billion partnership with General Motors. (AP Photo/Paul Sancya, File)


Read more: https://apnews.com/edf9d9a1d30081d024a76f66395ec9c5

[hunter]

1. Why would GM need them?

Electric car technology is not magic.

Did they just pay $2 billion for the name?

Or, worse...



https://en.wikipedia.org/wiki/General_Motors_EV1

[Miguelito Loveless]

4. It looks like "old boys network" back room dealing

to me.

Some former GM exec brokered a deal for Nikola and walked away with a fat payday, and apparently, rather than do "due diligence", GM just trusted the former exec. This could be the end of Mary Barra's job as well.

[mathematic]

11. GM is the one that got paid $2 Billion

Basically GM is to be given a $2B stake in Nikola for the promise to sell Nikola the parts they needed to make their cars in a few years.

There's really no downside for GM, apart from a hit to their reputation via association. It seems like a pretty good deal for GM and I expect they knew they had Nikola over a barrel.

[hunter]

12. Ah, I see. Too often I don't read up on these things before I post...

Personally, I'd like a little electric truck, something similar to a Chevy Volt or Bolt.

But electric cars and trucks are not going to save the world. We ought to be building cities such that most people are happy without owning a car.

The environmental footprint of automobiles, electric or not, is huge.

[Sherman A1]

2. Glad I waited on buying into this stock

[Miguelito Loveless]

5. Just my opinion,

but ANYONE touting H2 as an emerging technology for passenger cars and even heavy trucks should get a pass. The cost to build the infrastructure is in the trillions, and at $10-$15 per kg, the fuel is WAY too expensive.

[bucolic_frolic]

3. Yay, Con Men! Trump enabled your Golden Age!

[Miguelito Loveless]

6. To be fair, Milton has been peddling this scam for some time (at least 2015)

and they only managed to find more suckers when they pulled off a "reverse merger" and got onto the stock market without meaningful SEC scrutiny. Gullible investors saw another Tesla (despite the fact that Tesla has made around a million cars and Nikola has yet to produce one) and threw cash at it.

Also, Tesla haters on Wall Street saw Nikola as their way to stick it to Tesla, and GM saw it as a way to hedge against Tesla.

[bucolic_frolic]

9. Yeah but Milton didn't have the head room for a big time scam until now

Bernie Madoff could survive in this environment.

[keithbvadu2]

7. Is this one of the auto plants Trump bragged about starting up?

Is this one of the auto plants Trump bragged about starting up?

[marble falls]

8. Complicated by the fact that the whistle blower "Hindenburg said it had taken a short position ...

in Nikola stock, which means it could profit if the stock goes down" according to the article.

[not fooled]

10. Well, this just goes to show

that red don was right--alternative fuels are LOSERS.

He'll tweet out some such, as soon as one of his lackeys brings the situation to his attention and explains to him what it means.