Hindenburg and Citron Research Call Nikola a Fraud, Shares Continue to Plummet

A scathing report has just been released, and it has the electric vehicle (EV) world in flames today.

In a report Thursday, short-seller Hindenburg Research called Nikola a “fraud”, according to Auto Blog. The short-seller shared that it believes Nikola has been making up lies about its vehicles in order to gain steam in the stock market, and secure its $2 billion USD investment from GM.

In a statement to the press, Nikola officials said, “Nikola has been vetted by some of the world’s most credible companies and investors.” The officials continued, “[We] will not waver based on a report filled with misleading information attempting to manipulate our stock.”

According to Hindenburg, Nikola CEO Trevor Milton made false statements to major companies about Nikola’s capabilities. Additionally, the short-sellers claimed that Milton appointed brother Travis to head up the Hydrogen team at Nikola, in spite of the fact that he had no prior experience with the subject.

In the report, Hindenburg said, “Nikola seems to be bringing nothing to the partnership but concept designs, their brand name and up to $700 million they will be paying GM for costs related to production.”

In the midst of the controversy, Nikola Corporation’s shares have dropped over 8 percent, including a major divestment in the company from Hindenburg themselves. While it’s likely to recover with GM at its back, the press may hamper the EV company’s momentum this early on in its career.

Citron Research followed in Hindenburg’s footsteps today and also accusing Nikola of being a “total fraud”, says Business Insider. The additional scathing report sent Nikola shares down up to 18% on Friday.