Nikola Corp. founder and Executive Chairman Trevor Milton is stepping down from the electric truck company effective immediately. This comes in the wake of a report from a noted short-seller accusing the company of fraud. Milton is succeeded by Stephen Girsky, a former General Motors executive who was already on the company's board.
Nikola company stock fell as far as 30% in pre-market trading, currently trading around $25 a share. Over the last few months, the stock experienced wild trading; at one time the stock hit $79 a share.
"The focus should be on the company and its world-changing mission, not me. I intend to defend myself against false accusations leveled against me by outside detractors," Milton said in a statement posted on Twitter.
This month, Hindenburg Research, a short-seller, published a report alleging Nikola is misleading investors. Nikola refutes the claims.
"These allegations by the short seller are false and misleading and designed to manipulate the market to profit from a manufactured decline in Nikola's stock price," Nikola said, following Hindenburg Research's report.
This report came on the heels of a significant deal for Nikola. The young automaker had just signed an agreement with General Motors that gave GM 11% ownership in the upstart in exchange for technology and assistance getting Nikola's first model to market.
Electric trucks, both consumer and commercial versions, are quickly becoming a battleground for automakers. The market is ripe for innovation, and incumbent automakers are looking for partners to kickstart operations. Ford, the leader in consumer trucks, sided with Michigan-based Rivian, which is helping develop electric vehicles for Ford. General Motors' recent partnership with Nikola seemed smart at the time of its announcement. Still, now, after the Hindenburg report, the viability of the deal is in question, and with that, the future of GM's electric pickup.
Update: Hours after publishing the original report, unconfirmed news broke that Trevor Milton, Nikola Corp. founder and former executive chairman, was arrested by the DOJ and FBI at Sky Harbor Airport, in Phoenix, Arizona. This turned out to be false and we regret that we published it without direct confirmation.