We don't know yet who's right and who's not in the dispute between Nikola Corp., an EV startup in fundraising mode, and Hindenburg Research, a company that derives its profits from short selling stocks.
We won't delve into the mechanics of short selling, but let's just say that Hindenburg is in a position to rake in huge profits if Nikola's stock tanks.
To make that happen, Hindenburg published an extremely critical report last week about Nikola's business practices, the claims the company and its executive chairman, Trevor Milton, have made and its history of dealing with other companies and investors. There's a lot to unpack in that report, titled "Nikola: How to Parlay an Ocean of Lies Into a Partnership With the Largest Auto OEM in America." (Milton issued a rebuttal to the report on YouTube, which can be viewed here.)
Unless you've been on a desert island this year as a way to escape COVID-19, then you know Wall Street is currently mesmerized by EV startups. Not wanting to miss out on the next Tesla — which has seen the value of its shares more than quadruple this year — investment funds, established automakers, suppliers and mom and pop investors have been throwing money at EV startups.
Ford pumped $500 million into Rivian in 2019, and General Motors last week announced it was taking an 11 percent stake in Nikola.
You have to think that companies such as GM and suppliers such as Bosch, as well as potential customers who have placed orders for electric trucks with Nikola, have done their due diligence and have made sure Nikola has the technology, people, research, facilities and capability to deliver the products it has promised, namely a fuel cell-powered semitruck and the Badger, a midsize pickup that will be powered by either batteries or a fuel cell.