Nikola founder Trevor Milton resigns as chairman amid allegations, SEC probe

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Shares of electric-truck maker Nikola plunged on Monday after its founder Trevor Milton stepped down as executive chairman in the wake of fraud allegations against the embattled company. The 39-year-old will be replaced by Stephen Girsky, former vice chairman of General Motors and member of Nikola's board, effective immediately.

Since Nikola went public on June 4 via a merger with VectoIQ, the stock soared from below $15 to around $50 at the start of the month, following the announcement that General Motors will take a 11% stake in the company as part of a partnership to build electric pickup trucks.

"Nikola is truly in my blood and always will be, and the focus should be on the company and its world-changing mission, not me", Mr Milton said.

The stock tumbled after short seller Hindenburg Research questioned the validity of Nikola's claims about its electric-vehicle technology, accusing Nikola of being "an intricate fraud built on dozens of lies". In a letter to employees about his resignation Milton wrote: "I intend to defend myself against the false allegations leveled against me by outside detractors".

The U.S. Department of Justice has also been probing the claims made in the report, the FT said last week.

Mr Milton countered, calling Hindenburg's report a "hit job" in a tweet. He also agreed to check with lawyers for Nikola before posting anything about the company.

Shares in the company had already dropped by more than 19% in the days since the report was first published by Hindenburg.

Milton continued, "We've built a deep bench of talent over the years, and I am confident that Nikola's Chief Executive Officer, Mark Russell, supported by Chief Financial Officer, Kim Brady, and the rest of the leadership team will advance our goal of making Nikola the global leader in zero-emissions transportation". This is despite Nikola never having delivered an actual product to a customer. More recently, the company released information on its battery-electric pickup truck, the Badger, to be developed through a a strategic alliance with General Motors. Nikola did not deny that the truck in the video was rolling downhill.

Investors have sometimes struggled to keep up with Milton's messages, especially given the evolving list of projects Nikola is pursuing: battery-electric big rigs in Europe, fuel-cell-powered semis in the USA, an electric pickup to be built by GM and becoming the preeminent supplier of hydrogen for fleets of vehicles.

Nikola has had a co-development agreement with Germany's Robert Bosch since 2017 to develop key components such as fuel cells, motors and battery packs. However, it maintains that Nikola has since created "real working hydrogen fuel-cell powered semi trucks". GM will provide the fuel cells and battery packs.

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