Please ensure Javascript is enabled for purposes of website accessibility

Nikola Stock Falls After Founder and Chairman Milton Departs Amid Short-Seller Allegations

By John Rosevear – Sep 21, 2020 at 9:10AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Trevor Milton has left the company he founded, effective immediately.

Shares of electric-truck start-up Nikola (NKLA 0.42%) fell over 25% in premarket trading on Monday morning after the company said that its founder and chairman Trevor Milton had resigned overnight. 

Milton has been under pressure from allegations leveled by short-seller Hindenburg Research, which alleged in a report on Sept. 10 that Milton had misled investors with false claims about the company's technology.

"I asked the Board of Directors to let me step aside from my roles as Executive Chairman and a member of Nikola Board of Directors," Milton wrote in a statement posted to his Twitter account. "The focus should be on the Company and its world-changing mission, not me. I intend to defend myself against false allegations leveled against me by outside detractors."

Milton is shown standing on an auto-show stage with a red Nikola Two, an electric semi truck.

Nikola founder Trevor Milton, shown here with the company's Nikola Two semi last year, has left the company amid allegations that he misled investors. Image source: Nikola Corporation.

Steven Girsky, the former General Motors (GM 0.87%) vice chairman who led the special-purpose acquisition company that took Nikola public, has replaced Milton as chairman of Nikola's board of directors. 

In a statement, Girsky thanked Milton for his "visionary leadership and significant contributions to Nikola since its founding."

General Motors, which announced a deal to produce pickup trucks, fuel cells, and batteries for Nikola just a few days before Hindenburg's report was published, said in its own statement that it will continue to work with the embattled start-up. 

"We acknowledge Trevor Milton's departure from Nikola and the decision of the Nikola Board to move forward," GM said. "We will work with Nikola to close the transaction we announced nearly two weeks ago to seize the the growth opportunities in broader markets with our Hydrotec fuel cells and Ultium battery systems, and to engineer and build the Nikola Badger [pickup truck]."

GM said that its deal with Nikola, and a separate technology-sharing deal with Honda Motor, are just parts of its overall strategy to accelerate adoption of electric vehicles. 

John Rosevear owns shares of General Motors. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

General Motors Stock Quote
General Motors
$40.46 (0.87%) $0.35
Nikola Corporation Stock Quote
Nikola Corporation
$2.39 (0.42%) $0.01
Honda Motor Stock Quote
Honda Motor
$24.43 (1.33%) $0.32

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.