Nikola shares open at lowest price since IPO after company founder Trevor Milton resigns

Founder of Nikola, Trevor Milton speaks throughout presentation of its new full-electric and hydrogen fuel-cell battery vans in partnership with CNH Industrial, at an occasion in Turin, Italy December 2, 2019.

Massimo Pinca | Reuters

Shares of Nikola  opened Monday at their lowest price since the company went public June 4 after company founder and govt chairman Trevor Milton introduced his resignation in a single day.

The stock was down as a lot as 30% in premarket buying and selling earlier than opening at $24.97. Shares rebounded a bit after the open, buying and selling down by about 20% in early morning buying and selling.

Stephen Girsky, a former vice chairman of General Motors and a member of Nikola’s board, has been appointed chairman of the board, efficient instantly.

Milton’s departure follows the discharge of a report by short-seller Hindenburg Research accusing him of constructing false statements in regards to the company’s know-how to draw buyers and partnerships with different automakers.

The report, titled “Nikola: How to Parlay an Ocean of Lies Into a Partnership With the Largest Auto OEM in America,” was launched two days after the company introduced a take care of GM that despatched each firms’ shares hovering. It characterised Nikola as an “intricate fraud built on dozens of lies” by Milton.

The Securities and Exchange Commission and Department of Justice are reportedly trying into Hindenburg’s claims. 

In a press release Monday, GM mentioned it can “work with Nikola to close the transaction we announced nearly two weeks ago to seize the growth opportunities in broader markets” with its battery electrical and gas cell applied sciences. GM can also be serving to to engineer and and can construct the Nikola Badger.

“Nikola, Honda and other companies who are looking to GM’s technology as a platform for their products, represent just one part of our overall EV strategy,” the company mentioned. “Our overall goal is to put everyone in an EV and accelerate adoption.”

Wedbush Securities’ Daniel Ives described Milton’s departure as “a gut punch” to Nikola’s story and a “white knuckle period for Nikola bulls.”

“It’s a dark day for Nikola. Let’s just call it like it is. Trevor leaving, he’s a key part of the vision,” he mentioned Monday throughout CNBC’s Squawk Box. “That’s something investors have sort of bet on … I still believe there’s a story here, especially for GM.”

Shares of GM had been down about 4% in premarket buying and selling Monday.


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