Ex-Nikola Motors CEO Trevor Milton began his fraud trial in Manhattan yesterday.
Nikola Motors (NASDAQ: NKLA) is a hydrogen/electric vehicle startup that currently sells all-electric semi-trucks. However, it is alleged that the previous CEO, Trevor Milton, defrauded investors by lying about the company’s technology and production capabilities. The fraud trial is being held in Manhattan, and Milton is pleading not guilty.
The story of Nikola in 2020 is a strange one. They were considered a hot stock to buy after Milton had indicated that Nikola owned significant drivetrain technology and that the company was preparing to build their electric semi-trucks and an electric pickup truck in large quantities. An infamous video assured investors, showing a Nikola semi-truck running down a road. However, the video was eventually revealed to be faked as the truck was rolling down a hill. This video will be shown to jurors during the upcoming trial.
After the controversy, the CEO left the company but was detained by law enforcement.
Despite these challenges and a $125 million fine from the Securities and Exchange Commission, Nikola now produces its full electric semi-trucks. The company’s stock price has not recovered to its previous share price. Currently, the company is trading at roughly $5 a share.
The company itself, which is no longer connected to Milton, is looking to change itself for the better. The company has hired ex-Volkswagen CEO Michael Lohscheller to lead the company effective January 1, 2023, and was even able to beat Wall Street earnings expectations in Q2 despite its loss of funds. It remains unclear if the company can recover to its previous feverishly high stock price, but they are making the changes to attempt a legitimate turnaround.
Disclosure: William is not a Nikola investor.
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