Business_news Nikola slides 6% on SEC probe over short-seller claims the company misled investors through ‘intricate fraud’ and ‘deception’

Business_news

REUTERS/Massimo Pinca

  • Nikola shares fell 6% in premarket trading on Tuesday after the Securities and Exchange Commission said it will investigate a short-seller’s claims the company misled investors through “intricate fraud” and “deception.”
  • Short-selling investment firm Hindenburg Research released a lengthy report last week in which it said the electric-vehicle startup overstated the capabilities of its first Trucks.
  • The report followed Nikola’s announcement of a $2 billion deal with General Motors. Both headlines made for volatile trading. The shares are now a full 40% off last Tuesday’s record high.
  • “Nikola intends to fully cooperate with the SEC regarding its inquiry into these matters,” the company said in a statement on Monday.
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Nikolashares fell 6% in premarket trading on Tuesday, after Reuters reported the electric-truck maker isfacing an SEC probeover a short-seller’s claims of “intricate fraud.” 

The regulator’s investigation follows alengthy reportlast week by short-selling investment firm Hindenburg Research that said Nikola had been deceitful about its products and deals with other companies.  

The company denied all the claims and said Hindenburg was attempting to profit from a “manufactured decline” in its share price. 

“Nikola has contacted and briefed the U.S. Securities and Exchange Commission regarding Nikola’s concerns pertaining to the Hindenburg report,” the company saidin a statement on Monday. “Nikola intends to fully cooperate with the SEC regarding its inquiry into these matters.”

Last week, Nikola struck a$2 billion partnership deal with General Motors, sending the company’s shares on a wild ride

Shares in the electric-vehicle company surged as much as 53% last week, but rapidly retreated following the Hindenburg report. Its shares are now 40% below record highs reached last Tuesday, last down around 6% at $33.40 in premarket trade.

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On Friday, the company also threatened legal action against Hindenburg for accusing it ofnepotism and deception

The SEC will now examine possible violations of securities laws, but the investigation is said to be preliminary and may not lead to any findings of wrongdoing,according to Bloomberg.

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