Can Nikola become the next Tesla?

ONE WAY to try to emulate Tesla’s success is to name your firm after the same person. Nikola, founded in 2014 to make electric and hydrogen-powered lorries, is, like Elon Musk’s carmaker, named after Nikola Tesla, a Serbian-American pioneer of electricity. Nikola’s market value nudged $30bn after it went public in June. Some investors were puzzled that a firm not yet selling vehicles could be worth more than Ford, which sold 5.4m last year. Nikola’s share price fell back over the next two months. It jumped again on September 8th, after General Motors said it would take an 11% stake in the firm. 

This time the euphoria was even more short-lived. On September 10th Hindenburg Research, an investment firm (named after the airship disaster from 1937) released a report calling Nikola an “intricate fraud” that had told an “ocean of lies”. Nikola’s shares shed 36% of their value over the next couple of days.

Among other things, Hindenburg alleges that Trevor Milton, Nikola’s boss, made misleading statements when he unveiled the Nikola One, a hydrogen-electric lorry. Mr Milton, Hindenburg said, suggested a demo vehicle was driveable when it was not. A Nikola One shown travelling along a road in a separate video, Hindenburg claimed, was in fact rolling down a hill unpowered. The investment firm also gave short shrift to...

via Business Feeds

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