Despite Nikola Corp’s attempts to defend itself today, in response to a short-seller’s allegations the company deceived investors, the U.S. Securities and Exchange Commission is now probing the electric vehicle maker, according to unnamed sources speaking to Bloomberg.
Hindenburg Research called out Nikola as an “intricate fraud” on last week, citing the company had overstated its test truck capabilities. Now, the SEC will investigate Hindenburg’s claims to ensure Nikola did not violate any securities laws, reports Bloomberg’s sources.
The SEC review is preliminary and may not result in any wrongdoing by Nikola. The news sent Nikola shares tumbling as high as 11.7% in after-hours trading and are currently down nearly 8% as of writing.
Nikola previously admitted it had contacted the SEC in regards to the Hindenburg report claims.
“Nikola has contacted and briefed the U.S. Securities and Exchange Commission regarding Nikola’s concerns pertaining to the Hindenburg report,” said Nikola on Monday in a statement. “Nikola intends to fully cooperate with the SEC regarding its inquiry into these matters.”
Nathan Anderson, the founder of Hindenburg Research, told Bloomberg in a statement he’s “encouraged that regulators are examining the situation.”
A 2018 promo video was deemed misleading by Hindenburg, as a Nikola truck was not in fact driving on its own but rather rolling down a hill. Nikola social media posts at the time described the vehicle as “in motion” and claims the truck was never said to be driving on its own.
Behold, the Nikola One in motion. Pre-production units to hit fleets in 2019 for testing. The Nikola Hydrogen Electric trucks will take on any semi-truck and outperform them in every category; weight, acceleration, stopping, safety and features – all with 500-1,000 mile range! pic.twitter.com/K53FdYaZ34
— Nikola Motor Company (@nikolamotor) January 25, 2018
Phoenix-based Nikola will plan to build an electric semi-truck in Germany by the end of next year. A factory is under construction in Coolidge, Arizona, set to product fuel-cell semi-trucks by 2023, but to date, the company has yet to produce any vehicles.
GM partnered with Nikola last week, taking a $2 billion equity stake in the latter, with the traditional auto maker pledging to build the Nikola Badger, an electric pickup apparently coming soon, set to debut at Nikola World 2020 in Phoenix.