13 ms·

Nikola Denies 'Fraud' Allegations, Threatens Legal Action Against Short-Sellers

92 points by tomohawk 6y ago

itsoktocry 6y ago
Can anyone name a single, legitimate company that has ever been "taken down" by short-sellers? A company which had a great business going, but short-sellers ruined it? I don't even think it's possible. On the other-hand, frauds brought down by journalists and short-sellers are abundant. In my experience, CEOs (in this case, the board Chairman) whining about traders is a huge red flag. What do they care what a bunch of people are doing with their ownership in the company? It's irrelevant to the day-to-day operations of the company, but certainly harms the narrative.
- lionsdan 6y ago
  Indeed, if the short sellers are wrong, they should be able to take advantage like VW in 2008. https://www.reuters.com/article/us-volkswagen-idUSTRE49R3I920081028 https://www.reuters.com/article/us-volkswagen-idUSTRE49R3I92...
  - AnthonyMouse 6y ago
    Doing that inherently requires having access to a lot of capital.
- Qasaur 6y ago
  You can't really say this without the followers of the Church of Musk attacking you for going against the saviour of the human race, but this is why I think there is something very fishy going on with Tesla and Elon Musk who also has a tendency to blame short-traders for any negative press (of which there is a lot, some of it extremely unsettling).
  - itsoktocry 6y ago
    >but this is why I think there is something fishy going on with Tesla Well, maybe the Nikola thing will have people asking questions and holding Tesla to the same standard. We know, from depositions in the Solar City law suit, that the solar shingle reveal was faked and non-functional. The shingles didn't exist in that form then, and still don't (they buy panels from China, the factory in Buffalo isn't doing anything). The battery swap demo was also likely faked, as was the "Paint it Black" self-driving video from 2016 (demonstrating self-driving capabilities Tesla still doesn't have in the real world, today). Those are off the top of my head.
    - nemo44x 6y ago
      I’m curious about Tesla over hyping certain maturity of their tech and other things. They appear to me to dress up non-functional prototypes and make big events around them, only showing the feature in a certain, controlled environment. Sort of like a magician creating an illusion. How many years now has Tesla claimed that full autonomous driving will be ready by the end of the year? They sell a lot of that “software” which to me appears to be vapor ware and they claim the price will rise when the tech is GA’d so you should buy now. It just seems suspicious to me. Even the giga-factories don’t look anything like the designs they promoted. They look like, well every other car factory. I get that they don’t advertise so they smartly generate hype in other ways. Wasn’t Audi the first company to sell a level 3 car?
      - brisance 6y ago
        > They look like, well every other car factory. They're worse. Please, identify a modern car factory that builds cars in a tent.
        sjwright 6y ago
        Given how critically successful the Model 3 is, maybe more companies need to start building their cars in tents too. (Or maybe... just maybe... the construction method of your factory walls doesn’t actually matter so much?)
      - 6y ago
- deleted 6y ago
  [deleted]
- dnadler 6y ago
  Yes, short sellers are correct sometimes. Citron's report on Valeant comes to mind. Actually, as I recall there was a report prior to Citron's that was much more convincing though didn't get as much publicity.
- moneywoes 6y ago
  Luckin coffee?
  - polymorph1sm 6y ago
    At least they are already delisted from nasdaq[1] and their stock did plummet since muddy waters reports. [1] https://www.marketwatch.com/story/luckin-coffee-to-be-delisted-from-the-nasdaq-2020-06-26 https://www.marketwatch.com/story/luckin-coffee-to-be-delist...
  - hylaride 6y ago
    Luckin coffee had fraudulent numbers. It wasn’t an “otherwise good company”.
- marvin 6y ago
  Problem is, it's almost impossible to know unless you're there. Companies that are dependent on financing might not get financing if loud short sellers are able to change the narrative, and then fail to achieve goals that would be achievable if investors were on board. I don't know enough history to know concrete candidates, but I'd be very surprised if no company had ever been stopped from achieving a good trajectory by short sellers and other naysayers changing the perceptions of investors. Yes, there is a value in short selling as a market mechanism to detect fraud and correct incorrecly priced companies, but it's naïve to think it doesn't also incentivize destruction of initiatives that are actually valuable. I did follow the short campaign against Tesla closely from 2014-2018. And that project was vicious. I could easily see it toppling a less-financed company, or one where the quality of their engineering was less obvious. And trust me, although things might look black and white in retrospect, there was nothing obvious about Tesla's success in 2014. The indications were pretty clear if you followed it closely, but this reality was in very sharp contrast with the narrative. I believe it was a closer call than most would believe in reterospect. Comparisons with Nikola nonwithstanding, I believe you're wrong about loud short sellers in general not being able to destroy the prospects of a company that would succeed in their absence.
  - AnthonyMouse 6y ago
    It's also fairly trivial to see that it's possible to destroy some companies this way simply by noting that some companies succeed and some companies fail, which implies that there exist companies at the margin whose success or failure depends on things like financing availability or interest rates. Moreover, companies in that position are exactly those with the greatest profit potential for short sellers. Companies that are obviously going to succeed or already have aren't likely to decline in value in the near future. Companies that are obviously going to fail will have declined in value already. The largest opportunity for short sellers is when there is that uncertainty, because then you have a company walking a tightrope and there are people willing to bet that they make it to the other side. The short sellers can take their money and then give the company a hard shove and hope that it makes them fall.
    - itsoktocry 6y ago
- SpicyLemonZest 6y ago
  I'm still highly skeptical of Nikola, but it's not quite fair to characterize their response this way. The chairman here isn't complaining about the trading activity itself, just about the traders' report which he claims is full of lies.
  - ceejayoz 6y ago
    To be clear, though, he’s complaining it’s full of lies, while saying he won’t debunk them because they’re asking the SEC to get involved. Which will take years, and needn’t prevent them from disproving the claims. That’s suspicious.
    - SpicyLemonZest 6y ago
      Agreed.
  - ogre_codes 6y ago
    Several of the claims should be fairly straight forward to dispute. For example, they should have some video of the truck driving under its own power as opposed to coasting down a long downhill. Certainly in this day and age they have plenty of documentation of their vehicles during testing and development.
- yxhuvud 6y ago
  There are plenty of deconstructed companies that have ended up with positive value left when all is said and done and creditors are paid. It is not super common but it does happen now and then.
- odiroot 6y ago
  > Can anyone name a single, legitimate company that has ever been "taken down" by short-sellers? As far as I remember, Matt Levine used to say, a company that sues short-sellers is most likely deep into securities fraud.
- hylaride 6y ago
  Short selling by itself won’t ruin an otherwise good company, but if (false) rumors are spread, it can affect the company’s ability to raise capital or affect its relationships with suppliers, who could get nervous.
  - easytiger 6y ago
    Well as a public company if you aren't really able to prove the state of your balance sheet then you probably do have an issue.
- electriclove 6y ago
  https://teslamotorsclub.com/tmc/threads/elon-musk-vs-short-sellers.118431/ https://teslamotorsclub.com/tmc/threads/elon-musk-vs-short-s...
  - itsoktocry 6y ago
    So your claim is that SolarCity was brought down by short-sellers, and not, in fact, that it was a terrible business? That's debatable. Borrowing short and lending on long-term leases was more likely the issue.
    - electriclove 6y ago
      Not my claim at all. The parent asked for an example of short sellers doing damage and I showed a highly documented example of Fairfax Financial
- cwhiz 6y ago
  No. But I still think short selling is absurd and I don’t understand why we allow it. If you don’t think a company will do well then don’t buy their stocks. Simple as that. I don’t know why we allow seemingly infinite market gambling that benefits no one except the gamblers.
  - liability 6y ago
    If Hindenburg weren't financially incentivized to uncover this fraud, it seems likely they would not have bothered and many more people would get scammed by Nikola.
    - cwhiz 6y ago
      That’s what journalism is for.
      - liability 6y ago
        ¿Por qué no los dos? Journalists got to Theranos first, and short sellers got to Nikola first. With both in play, the odds of a timely exposé go up.
        toby 6y ago
        Worth nothing that Theranos wasn't public, there was no opportunity to short-sell. If there had been they might have been exposed much earlier and done a lot less harm. I knew several people who said what they were claiming was impossible but they didn't really have any interest in being the whistleblower.
        cwhiz 6y ago
        Only one of those things is beneficial to society or business.
        liability 6y ago
        Care to back up that opinion? I'm quite curious to know why you think Hindenburg exposing this fraud to the world, and consequently saving countless more people from being scammed, isn't beneficial to society and legitimate business.
- boring_twenties 6y ago
  What I wanted to ask was, can anyone name a single, legitimate company that has threatened to sue short-sellers and ended up not being exposed as a fraud and/or bankrupt?
  - ant6n 6y ago
    Didn't Musk threaten short-sellers? Wasn't there also that weird promise to go private?
- redis_mlc 6y ago
  Insiders may have loans secured by company stock, so it impacts their ability to buy another yacht, winery or pay alimony.
- deleted 6y ago
  [deleted]
ceejayoz 6y ago
> Milton indicated that the company will provide no further in-depth public comments until the SEC "finishes their work." How about showing media outlets the truck going up that 3% grade from a cold start? Or showing the solar panels on the company’s roof? Many of the allegations would be trivial to disprove, if they are in fact false, and doing so seems unlikely to anger the SEC.
- pas 6y ago
  Did they indicate that that truck was a proper real thing, and their future trucks will be at least that capable? Or it was just a concept car, like what automakers used to do for decades?
  - itsoktocry 6y ago
    >Or it was just a concept car, like what automakers used to do for decades? Can you really not differentiate the claims made by Nikola vs a manufacturer building a one-off concept car and parking it at a car show?
    - pas 6y ago
      I'm so out of context for both of these things, that I really can't. For me the Nikola video looks like a trailer, or like any typical over-hyped product launche for phones/laptops/gadgets. That it's a vehicle is almost irrelevant. Also they claim in the youtube video's description that it's a 1000HP semi. And that seems like a very explicit claim. (So if it can't accelerate by itself, then where are those horsepowers. But as I tried to point out in a sibling comment, it's possible they can claim the engine is 1000HP but the fuel cells were not ready. On top of all that I'm very much interested in seeing this get to the courts and hear what they say about what constitutes fraud and what's just run of the mill hype.)
  - ceejayoz 6y ago
    https://www.youtube.com/watch?v=IAToxJ9CGb8 https://www.youtube.com/watch?v=IAToxJ9CGb8 has the headline "Nikola One Electric Semi Truck in Motion", and shows with camera angles implying it goes uphill. Lots of frauds are done this way - trying to pull the "well, we didn't exactly say what you think we did". It remains fraud.
ericb 6y ago
I have mixed feelings on this. Nikola has a Theranos vibe to it. On the other hand, "Citron Research" has created stock crashes on shaky ground in both Shopify and Tesla using hit pieces with claims that didn't pan out. I'm not sure if it is a stopped-clock is right twice a day thing, or if this is a poker strategy adding to EV by mixing in bluffs with solid poker hands.
nkurz 6y ago
Nikola's refutation says that "an activist short-seller whose motivation is to manipulate the market and profit from a manufactured decline in our stock price published a so-called “report” replete with misleading information and salacious accusations directed at our founder and executive chairman. To be clear, this was not a research report and it is not accurate. This was a hit job for short sale profit driven by greed." It seems clear that they are right that the report is driven by "greed" and "short sale profit", and that the goal is drive down their stock price. The more important question, though, would seem to be whether the accusations are true. Are there any Nikola supporters here who can debunk any of the bullet points at the top of the Hindenburg report: https://hindenburgresearch.com/nikola/ https://hindenburgresearch.com/nikola/. Conclusively refuting any of them would be useful, but the most important ones to me are the ones involving their demos. Did they lie to the public about the functionality of their vehicles at the time? Or did they merely mislead the public with language like "in motion" and "cruising" to describe a truck rolling down a natural incline? Does that distinction matter to you, or only as relates to potential SEC action? (I'm currently holding some puts that I bought---slightly too late to be profitable yet---as a result of Hindenburg's report, making me effectively short NKLA)
eanzenberg 6y ago
Lol
m3kw9 6y ago
Smearing his current company based on his past makes the short case less trust worthy
- liability 6y ago
  When somebody decides to 'cash out' their reputation by conning people for years, I can't be sympathetic to their whining about nobody trusting them anymore. That's how reputation works and there's nothing unfair about it.
- ogre_codes 6y ago
  > Smearing his current company based on his past makes the short case less trust worthy So you'd invest in Elizabeth Holme's next bio-tech startup?
  - m3kw9 6y ago
    Less likely but would need to closely scrutinize it more than before. I believe in 2nd chances.
    - ogre_codes 6y ago
      Fool me once, shame on you. Fool me twice, shame on me. Second chances are for people who make mistakes, not for people who engage in fraud and deception. If you give me the shaft consciously and knowingly, it's a long road to get my trust back.
ahelwer 6y ago
CEO claiming all the allegations are false, factual refutations totally exist, but they can't publish those refutations until the SEC "finishes their job". What a scam artist. Always some excuse, always delays, just milking the fraud as long as possible.
- xenospn 6y ago
  Sounds exactly like trump “not releasing his taxes because they’re under audit”. I guess they both read the same book.
aazaa 6y ago
There's a simple antidote to the claims: ship products. The company appears to have trouble doing this, and AFAICT has not shipped a single production vehicle. Nikola should focus on that, not trying to levitate the company's share price higher by jawboning. The comparison to Theranos is apt in that the response of that company was to jawbone rather than ship.
- cultus 6y ago
  They could completely discredit the Hindenberg report simply by release a video of the truck clearly driving under its own power. They haven't, and instead are just issuing these legal threats against shorters. This hysteria against short sellers in some circles is great for hiding fraud. Wirecard also comes to mind.
  - liability 6y ago
    Anti-short hysteria has been bugging me recently. It seems to be a recent trend and when I try to think who might have triggered it, I come up with one clear answer...
  - postingawayonhn 6y ago
    They do have drivable prototypes now (of the Two, not the One) and there's plenty of videos. How well designed/built they are is another question.
    - cultus 6y ago
      If they are lying about the drivability of One (which they almost certainly are), what does that say about Two? They've fairly obviously faked other tech, including covering up an OEM logo on an ostensibly original piece of tech with duct tape.
diogenescynic 6y ago
Threatening to sue short sellers always seems desperate.
reitzensteinm 6y ago
I don't understand Nikola at all. There are so many red flags, yet large credible companies appear to be willing to partner with them and buy from them. I suspect the terms are probably quite one sided, but even then there's reputation risk for partnering with the next Theranos. I listened to the CEO talk for an hour about their dedicated route hydrogen business model for trucking, and it actually seems like a good idea. The thesis is that 25% of trucks drive back and forth on the same route for their entire lifetime, so you pick the busiest route, build a hydrogen station on it, and sell a bunch of trucks to use it at capacity. This avoids the chicken and egg problem of building thousands of stations everywhere before you can sell your first vehicle. I don't know anything about the industry, and I wouldn't trust their ability to execute, but the plan itself seems sensible. As the renewable grid share increases, there's going to be a bunch of excess capacity at times that can be used very cheaply, meaning the end to end efficiency of hydrogen may not be a deal breaker. Without a multiple of current battery energy density, long range BEV trucking will be tough. Then there's the Badger/GM partnership. They got Iveco to make their trucks, and now they're getting GM to make their pickup. It makes me wonder if their strategy is going to be permanently outsource manufacturing and try to be a Pepsi to Tesla's Coke, partnering with traditional manufacturers which are able to build vehicles technically, but lack the modern sexiness of the new crop of BEV car makers. But if they do pull any of this off, it's going to go down as one of the greatest fake it til you make it examples in modern history. They probably did bullshit their way in to this market cap - I wouldn't be surprised if every word of the short seller report is true. But the market cap does opens doors.
- gridlockd 6y ago
  The plan still does not make economical sense without massive reductions in the cost of hydrogen or massively more valuable carbon credits. However, if carbon credits become more valuable, synthetic gasoline will become economical as well. Those are all big ifs. As far as I can tell, Nikola is bringing nothing to the table but hot air. No breakthrough in hydrogen production nor batteries nor engines, nothing that existing car makers do not already have.
  - cwhiz 6y ago
akrymski 6y ago
I don't think the comparison to Theranos is accurate. Nikola may be overvalued, but they do have (billions?) loads of pre-orders for hydrogen trucks. Manufacturing the vehicles isn't rocket science - lots of companies are manufacturing hydrogen buses that are in use in EU for example. The tech definitely exists, the same way battery tech existed before Tesla. Hydrogen makes more sense for trucks as it's lighter, and by outsourcing manufacturing most of the risk is removed. PS Email me if you are interested in building a hydrogen powered flying vehicle.
- bfieidhbrjr 6y ago
  The preorders mainly come from a company with tiny assets, I think sub $100m. It's hot air.
  - pepy 6y ago
    "U.S. Xpress had only $1.3 million in cash on hand last quarter."
- sixQuarks 6y ago
  By preorders, you mean an email list of people who said they’re interested, but left no deposit whatsoever.
- nickik 6y ago
  Just outsource everything even outsourcing itself. Why do you even have company, you can just sit in your basement and order a bunch of trucks from another company have some contractor put new stickers on it and ship them to costumers. Pay somebody else to set up the fuel station, do the repairs and so on. The costumer service you outsource to India. You don't even need more then 1 employ, you can chill while that employ does all the outsourcing. I'm sure that company would be bigger then Apple soon. I mean no labor cost, no capx and a huge market. What a genius move.
- jariel 6y ago
  The orders are not paid up and many from companies with bad balance sheets. The truck is vaporware and Nikola has no experience actually making or doing anything. So bringing anything in on time and anywhere near cost is going to be a challenge. "PS Email me if you are interested in building a hydrogen powered flying vehicle." - that's such an HN thing to write!
llboston 6y ago
I have no insider info but leaning to believe that at least Hindenburg Research's report is partially correct based on a few things: 1. I listened to Nikola founder Trevor's interview on Jason Calacanis's podcast, and was sold on the advantage of Hydrogen fuel cell over battery for long haul trucks. Such a huge market! And then Trevor said Nikola, a 400 people company, are also working on the an electric pickup called Badger to be more consumer facing. This makes no biz sense to me at all and I realized they are probably just chasing the trend. 2 At the time Nikola doing the first Earnings call ever, Trevor was on a 6-day vacation in the Bahamas, while bragging about having a $13 Million airplane. Trevor is no Elon. No matter how much you hate Elon, he works his butt off, and that gets my respect automatically. 3 I understand Nikola want to protect their trade secrets and go through SEC first, but in their press release [2] they have shown nothing to prove that Hindenburg Research's report is wrong. [1] https://thisweekinstartups.com/e1090-nikola-founder-trevor-milton-on-competing-with-tesla-hydrogen-over-battery-going-public-as-a-pre-revenue-company-more/ https://thisweekinstartups.com/e1090-nikola-founder-trevor-m... [2] https://nikolamotor.com/press_releases/nikola-refutes-allegations-95 https://nikolamotor.com/press_releases/nikola-refutes-allega...
- bfieidhbrjr 6y ago
  The SEC thing is a smokescreen. There is no reason to go to or via the SEC for their rebuttal, if anything they're just trying to get ahead of the PR nightmare of the SEC going to them. Them staying silent and sending info to the SEC is a big red flag, but to the lay investor it looks good, which is why they did it.
  - deleted 6y ago
    [deleted]
- jdmichal 6y ago
  I also find the specific wording of the counter interesting. They don't actually say anything is untrue, but instead use terms like "misleading information", "salacious accusations", and "not accurate". So I have a really hard time believing that the report is not onto something, because it definitely sounds like legal was consulted on the wording. It is very specifically phrased to, say, allow the reported facts to be true but the interpretation of the facts to be wrong.
projektfu 6y ago
Legal action? Did they lie (libel)? Did they fail to disclose their position?
brianwawok 6y ago
Let's pretend everything is true as presented. Maybe a little marketing exaggeration, but a real product is close to ready. Cool. Looking at various sources such as https://www.greencarreports.com/news/1127660_battery-electric-or-hydrogen-fuel-cell-vw-lays-out-why-one-is-the-winner https://www.greencarreports.com/news/1127660_battery-electri... I just don't see the case for hydrogen over battery? It surely can cost less, but I see battery pricing dropping every year. In the 20 year timeframe, is hydrogen still a big win over batteries? Is there something fundamental about the technology that makes storing hydrogen better than batteries?
- Hypx 6y ago
  I see batteries not getting much cheaper at all, and likely hitting some plateau in cost reductions. It wouldn't surprise me if it is followed by cost increases as demands for sustainable production and recyclability increase. Hydrogen is not just cheaper than batteries, but fundamentally cheaper in a way that batteries can never match. For instance, underground storage is at the cents per kWh of storage. So batteries can never get there. In 20 years, I suspect FCEVs will have taken over, with BEVs mostly abandoned as being too expensive to justify their existence in most circumstances.
  - brianwawok 6y ago
    Fundamentally I agree that FC storage can be very cheap. Just a metal tank with some valves or whatever, right? a) What stops the fundamentals of batteries from also continuing to get cheaper? Current batteries are using less of some expensive metals, is there some kind of law that is going to make us hit a wall at current battery pricing? I don't see this yet, nor have I seen research papers, but I may have just missed them? b) The way I understand it, is the cost of creating the Hydrogen is the expensive part now. Is there proof that it will be cheaper with time, and that the end state of producing hydrogen is cheaper than the end state of producing batteries?
    - Hypx 6y ago
      You need a lot of metal, especially if you want a big battery. Realistically we're not going to see batteries much cheaper than what we have now. Hydrogen is likely to be cost of green energy plus some additional cost factor. So if solar is $0.02/kWh, then hydrogen will be maybe 2x that in the very long run. Everything points to hydrogen eventually getting to around $1/kg, or cheaper than just about any other kind of fuel.
samizdis 6y ago
Reasonably measured take on the story from the FT: https://www.ft.com/content/8a8a2396-6e97-4cfd-9f80-c5aaa2de304f https://www.ft.com/content/8a8a2396-6e97-4cfd-9f80-c5aaa2de3... Sadly, I've not been able to find a non-paywalled version syndicated anywhere else. (Although it can be retrieved at archive.is) Some interesting quotes from the article: In this relentless barrage of hype, delivered in a disarmingly low-key manner, it is easy to forget the reality. Nikola has yet to put any vehicles into production. And, as its regulatory filings make clear, it has no orders at all for its fuel cell trucks, only non-binding reservations. As for all the technological brilliance ... there is precious little to be seen. Nikola boasts a grand total of only 11 patents in the US, with another 55 applications pending. And later: Nikola faked a video of one of its trucks by making it look like the vehicle was driving under its own power when it was really only rolling downhill, according to Hindenburg’s report — a claim backed up by FT reporting this week. “It was built to be a working prototype,” Mr Russell insists of the truck. But did it actually work? His answer, after a long pause: “I wouldn’t comment on that.” In its pay-off, the FT draws pointed comparisons with Theranos. A good read, wherever the truth lies.
- imglorp 6y ago
  I'm a little curious about the (allegedly?) rigged demos. There's dozens of youtube garage tinkers who could slam some off the shelf parts into a random salvage chassis in under a week. Maybe they won't meet many performance targets but they'll at least be able to show something moving under its own power. The point is, making one electric or H2 vehicle is a very low bar now. Making one manufacturable, and a production line to do it, is the hard problem. So why show a nonworking sham?
  - jboog 6y ago
    Yeah you're right, it's all so bizarre. This dude IPOd a unicorn startup and is (for now) a billionaire by selling a vision of a manufacturing company with a non-working prototype that literally almost anyone with modest engineering skills could pull off. The Founder has no engineering background (in fact no college degree), no experience in the vehicle industry, no brilliant engineers or killer patent on technology. It smelled super fishy when they first IPO'd but I figured since all these VCs and vehicle manufacturers were partnering with them there must be something under the hood. Now it seems like such a transparent fraud. How did so many people that should have known better get conned into this?
tomdell 6y ago
That GM entered into a highly valuable partnership with this transparently fraudulent company doesn’t inspire confidence about their future. Milton’s last company was accused of not delivering on deal terms, and it seems as though that company BSed their way to an acquisition. Before that, he was involved in random low-tech businesses - at least one of which he seemingly lied to a partner about his profit off of. The company’s name is so unoriginal that I wonder how anyone can take them seriously. It’s like an off-brand Tesla - just riding the association to trick people into parting with their money?
- Qub3d 6y ago
  I suspect, as does Hindenburg research, that GM saw the Nikola partnership as more of a PR spend than a partnership. Its about the optics.
nimish 6y ago
Companies that spend time agitating about short sellers have a straightforward way of shutting them down: proving they are a legit, going concern and bankrupting shorts. That's the nature of the game when you're trying to sell shares. It's on you to prove you are a real company. The SEC requirements are because prior to them companies lied all the damn time and got away with it
bitxbit 6y ago
Nikola isn’t really an innovator in my view. They take what’s out in the market and assemble them which is not really that practical when it comes to manufacturing vehicles. This is like me saying I have an automobile company for nuclear powered trucks. And they should be valued as such. There are a lot of electric car manufacturers putting in real work such as Bollinger Motors.
switch11 6y ago
This is interesting to me I watched some videos of Trevor Milton. He has ZERO signs he is faking HOWEVER A) Just because someone's body language and presentation is PERFECT doesn't mean they are telling the truth. They might have convinced themselves of the lie B) The Truck Video is SUPER DODGY. It's shot from an angle that makes it impossible to tell what the incline angle is. It could VERY easily be just a truck with no engine rolling down a slight incline C) The walkthroughs etc. Trevor Milton does are SUPER DODGY. Elon Musk with Tesla talks about crazy things that might never happen (Full Auto Pilot Level 5 Driving) but half of the crazy stuff he DELIVERS Trevor Milton seems to be just as good as Musk at promising things, but so far has not delivered anything * On the one hand, it would be great if Nikola delivers a great truck Competition for Tesla Death to these parasitic short sellers ON THE OTHER HAND Don't see what exactly is the VALUE Nikola is providing. GM is building everything. So is Nikola's contribution selling a great story ??? It's like Musk's ability to sell stories, but lacking Musk's abilities to A) get subsidies from the government B) actually deliver products Trevor Milton and Nikola are getting money from the stock market. That comes with a lot of dangers which government contracts and subsidies do not
- liability 6y ago
  Did you believe short sellers are "parasites" before Elon Musk started ranting about them, or did you get this idea from him?
raiyu 6y ago
Does anyone have issue with the name of company besides me? I mean the largest EV manufacturer is Tesla and they name their company Nikola? It’s like years ago when public companies would rebrand as blockchain companies and see their stock soar.
- liability 6y ago
  I think this was one of the first red flags. It reminds me of ripoff movies that have names similar to popular movies to sleaze some of that popularity for themselves. Like Transformers / Transmorphers.
bryanlarsen 6y ago
Interesting to compare against Lucid Motors. Founded thirteen years ago and still not shipping, dismissed as vaporware for so long, yet are now surprising people by getting production versions of their car to early reviewers. https://m.youtube.com/watch?v=7ZkuJY1GWtE https://m.youtube.com/watch?v=7ZkuJY1GWtE
mschuster91 6y ago
Lawsuits against shortsellers? Where did we have that just recently? Oh yeah, Wirecard - or as we call it in Germany "Auweiacard"...
exabrial 6y ago
How much is their CEO getting paid vs what have they delivered? There are _definitely_ _a_ _lot_ _of_ red flags.
jariel 6y ago
$30 Billion valuation with no product, no customers. Insiders taking millions out of the company. Lied about major IP developments and ownership (Hydrogen, Fuel Cells, parts) This is insane, and I can't believe that GM would go near this toxic pile of garbage, it's utterly shameful and makes GM execs look completely stupid and incompetent. GM is getting an 'inspired truck idea' - how hard would it be to create a little independant division and hire some freaking designers and inspire people a little bit? Which would be good for their whole company? Nikola looks like fraud, but they're just a scammers, in a way it makes GM look worse.
darksaints 6y ago
Its unfortunate that their failures are going to prevent VC investment in fuel cell tech for the next couple of decades. Some suggestions, not that they're listening: 1) deliver one thing before promising the next 2) Use SOFCs, not PEMFCs. They're more stable, more efficient, longer lasting, higher power density, can use hydrocarbon fuels if necessary, produce heat at useful temperatures, and they're way cheaper. Their only disadvantage is their startup times, which is not a problem, and never has been, for long haul trucking. 3) Choose your competitors better. You have zero expertise in building trucks, but you have amassed expertise in building fuel cell power plants. Lucky you: trucking is nothing like cars...alternative powerplant manufacturers are extremely common upgrades when buying a truck. Instead of competing with Peterbilt, you should be competing with Cummins as a supplier for Peterbilt. And when you've pierced that market, you start going after Mitsubishi, Wartsila, Hyundai, Rolls Royce, and MAN.
saberdancer 6y ago
I really dislike the name of the company. Screams copycat and scam.
new_realist 6y ago
It's amusing to see Tesla stans hate on Nikola, when the two companies' characteristics and tactics are almost identical. Any criticism that applies to Nikola applies to Tesla, and vice versa. If anything, Nikola is moving more quickly than Tesla did early in its 17 year history.

92 points by tomohawk 6y ago

Can anyone name a single, legitimate company that has ever been "taken down" by short-sellers? A company which had a great business going, but short-sellers ruined it? I don't even think it's possible. On the other-hand, frauds brought down by journalists and short-sellers are abundant. In my experience, CEOs (in this case, the board Chairman) whining about traders is a huge red flag. What do they care what a bunch of people are doing with their ownership in the company? It's irrelevant to the day-to-day operations of the company, but certainly harms the narrative.

lionsdan 6y ago
Indeed, if the short sellers are wrong, they should be able to take advantage like VW in 2008. https://www.reuters.com/article/us-volkswagen-idUSTRE49R3I920081028 https://www.reuters.com/article/us-volkswagen-idUSTRE49R3I92...
- AnthonyMouse 6y ago
  Doing that inherently requires having access to a lot of capital.
Qasaur 6y ago
You can't really say this without the followers of the Church of Musk attacking you for going against the saviour of the human race, but this is why I think there is something very fishy going on with Tesla and Elon Musk who also has a tendency to blame short-traders for any negative press (of which there is a lot, some of it extremely unsettling).
- itsoktocry 6y ago
  >but this is why I think there is something fishy going on with Tesla Well, maybe the Nikola thing will have people asking questions and holding Tesla to the same standard. We know, from depositions in the Solar City law suit, that the solar shingle reveal was faked and non-functional. The shingles didn't exist in that form then, and still don't (they buy panels from China, the factory in Buffalo isn't doing anything). The battery swap demo was also likely faked, as was the "Paint it Black" self-driving video from 2016 (demonstrating self-driving capabilities Tesla still doesn't have in the real world, today). Those are off the top of my head.
  - nemo44x 6y ago
    I’m curious about Tesla over hyping certain maturity of their tech and other things. They appear to me to dress up non-functional prototypes and make big events around them, only showing the feature in a certain, controlled environment. Sort of like a magician creating an illusion. How many years now has Tesla claimed that full autonomous driving will be ready by the end of the year? They sell a lot of that “software” which to me appears to be vapor ware and they claim the price will rise when the tech is GA’d so you should buy now. It just seems suspicious to me. Even the giga-factories don’t look anything like the designs they promoted. They look like, well every other car factory. I get that they don’t advertise so they smartly generate hype in other ways. Wasn’t Audi the first company to sell a level 3 car?
    - brisance 6y ago
      > They look like, well every other car factory. They're worse. Please, identify a modern car factory that builds cars in a tent.
      - sjwright 6y ago
        Given how critically successful the Model 3 is, maybe more companies need to start building their cars in tents too. (Or maybe... just maybe... the construction method of your factory walls doesn’t actually matter so much?)
    - 6y ago
deleted 6y ago
[deleted]
dnadler 6y ago
Yes, short sellers are correct sometimes. Citron's report on Valeant comes to mind. Actually, as I recall there was a report prior to Citron's that was much more convincing though didn't get as much publicity.
moneywoes 6y ago
Luckin coffee?
- polymorph1sm 6y ago
  At least they are already delisted from nasdaq[1] and their stock did plummet since muddy waters reports. [1] https://www.marketwatch.com/story/luckin-coffee-to-be-delisted-from-the-nasdaq-2020-06-26 https://www.marketwatch.com/story/luckin-coffee-to-be-delist...
- hylaride 6y ago
  Luckin coffee had fraudulent numbers. It wasn’t an “otherwise good company”.
marvin 6y ago
Problem is, it's almost impossible to know unless you're there. Companies that are dependent on financing might not get financing if loud short sellers are able to change the narrative, and then fail to achieve goals that would be achievable if investors were on board. I don't know enough history to know concrete candidates, but I'd be very surprised if no company had ever been stopped from achieving a good trajectory by short sellers and other naysayers changing the perceptions of investors. Yes, there is a value in short selling as a market mechanism to detect fraud and correct incorrecly priced companies, but it's naïve to think it doesn't also incentivize destruction of initiatives that are actually valuable. I did follow the short campaign against Tesla closely from 2014-2018. And that project was vicious. I could easily see it toppling a less-financed company, or one where the quality of their engineering was less obvious. And trust me, although things might look black and white in retrospect, there was nothing obvious about Tesla's success in 2014. The indications were pretty clear if you followed it closely, but this reality was in very sharp contrast with the narrative. I believe it was a closer call than most would believe in reterospect. Comparisons with Nikola nonwithstanding, I believe you're wrong about loud short sellers in general not being able to destroy the prospects of a company that would succeed in their absence.
- AnthonyMouse 6y ago
  It's also fairly trivial to see that it's possible to destroy some companies this way simply by noting that some companies succeed and some companies fail, which implies that there exist companies at the margin whose success or failure depends on things like financing availability or interest rates. Moreover, companies in that position are exactly those with the greatest profit potential for short sellers. Companies that are obviously going to succeed or already have aren't likely to decline in value in the near future. Companies that are obviously going to fail will have declined in value already. The largest opportunity for short sellers is when there is that uncertainty, because then you have a company walking a tightrope and there are people willing to bet that they make it to the other side. The short sellers can take their money and then give the company a hard shove and hope that it makes them fall.
  - itsoktocry 6y ago
SpicyLemonZest 6y ago
I'm still highly skeptical of Nikola, but it's not quite fair to characterize their response this way. The chairman here isn't complaining about the trading activity itself, just about the traders' report which he claims is full of lies.
- ceejayoz 6y ago
  To be clear, though, he’s complaining it’s full of lies, while saying he won’t debunk them because they’re asking the SEC to get involved. Which will take years, and needn’t prevent them from disproving the claims. That’s suspicious.
  - SpicyLemonZest 6y ago
    Agreed.
- ogre_codes 6y ago
  Several of the claims should be fairly straight forward to dispute. For example, they should have some video of the truck driving under its own power as opposed to coasting down a long downhill. Certainly in this day and age they have plenty of documentation of their vehicles during testing and development.
yxhuvud 6y ago
There are plenty of deconstructed companies that have ended up with positive value left when all is said and done and creditors are paid. It is not super common but it does happen now and then.
odiroot 6y ago
> Can anyone name a single, legitimate company that has ever been "taken down" by short-sellers? As far as I remember, Matt Levine used to say, a company that sues short-sellers is most likely deep into securities fraud.
hylaride 6y ago
Short selling by itself won’t ruin an otherwise good company, but if (false) rumors are spread, it can affect the company’s ability to raise capital or affect its relationships with suppliers, who could get nervous.
- easytiger 6y ago
  Well as a public company if you aren't really able to prove the state of your balance sheet then you probably do have an issue.
electriclove 6y ago
https://teslamotorsclub.com/tmc/threads/elon-musk-vs-short-sellers.118431/ https://teslamotorsclub.com/tmc/threads/elon-musk-vs-short-s...
- itsoktocry 6y ago
  So your claim is that SolarCity was brought down by short-sellers, and not, in fact, that it was a terrible business? That's debatable. Borrowing short and lending on long-term leases was more likely the issue.
  - electriclove 6y ago
    Not my claim at all. The parent asked for an example of short sellers doing damage and I showed a highly documented example of Fairfax Financial
cwhiz 6y ago
No. But I still think short selling is absurd and I don’t understand why we allow it. If you don’t think a company will do well then don’t buy their stocks. Simple as that. I don’t know why we allow seemingly infinite market gambling that benefits no one except the gamblers.
- liability 6y ago
  If Hindenburg weren't financially incentivized to uncover this fraud, it seems likely they would not have bothered and many more people would get scammed by Nikola.
  - cwhiz 6y ago
    That’s what journalism is for.
    - liability 6y ago
      ¿Por qué no los dos? Journalists got to Theranos first, and short sellers got to Nikola first. With both in play, the odds of a timely exposé go up.
      - toby 6y ago
        Worth nothing that Theranos wasn't public, there was no opportunity to short-sell. If there had been they might have been exposed much earlier and done a lot less harm. I knew several people who said what they were claiming was impossible but they didn't really have any interest in being the whistleblower.
      - cwhiz 6y ago
        Only one of those things is beneficial to society or business.
        liability 6y ago
        Care to back up that opinion? I'm quite curious to know why you think Hindenburg exposing this fraud to the world, and consequently saving countless more people from being scammed, isn't beneficial to society and legitimate business.
boring_twenties 6y ago
What I wanted to ask was, can anyone name a single, legitimate company that has threatened to sue short-sellers and ended up not being exposed as a fraud and/or bankrupt?
- ant6n 6y ago
  Didn't Musk threaten short-sellers? Wasn't there also that weird promise to go private?
redis_mlc 6y ago
Insiders may have loans secured by company stock, so it impacts their ability to buy another yacht, winery or pay alimony.
deleted 6y ago
[deleted]

ceejayoz 6y ago

> Milton indicated that the company will provide no further in-depth public comments until the SEC "finishes their work." How about showing media outlets the truck going up that 3% grade from a cold start? Or showing the solar panels on the company’s roof? Many of the allegations would be trivial to disprove, if they are in fact false, and doing so seems unlikely to anger the SEC.

pas 6y ago
Did they indicate that that truck was a proper real thing, and their future trucks will be at least that capable? Or it was just a concept car, like what automakers used to do for decades?
- itsoktocry 6y ago
  >Or it was just a concept car, like what automakers used to do for decades? Can you really not differentiate the claims made by Nikola vs a manufacturer building a one-off concept car and parking it at a car show?
  - pas 6y ago
    I'm so out of context for both of these things, that I really can't. For me the Nikola video looks like a trailer, or like any typical over-hyped product launche for phones/laptops/gadgets. That it's a vehicle is almost irrelevant. Also they claim in the youtube video's description that it's a 1000HP semi. And that seems like a very explicit claim. (So if it can't accelerate by itself, then where are those horsepowers. But as I tried to point out in a sibling comment, it's possible they can claim the engine is 1000HP but the fuel cells were not ready. On top of all that I'm very much interested in seeing this get to the courts and hear what they say about what constitutes fraud and what's just run of the mill hype.)
- ceejayoz 6y ago
  https://www.youtube.com/watch?v=IAToxJ9CGb8 https://www.youtube.com/watch?v=IAToxJ9CGb8 has the headline "Nikola One Electric Semi Truck in Motion", and shows with camera angles implying it goes uphill. Lots of frauds are done this way - trying to pull the "well, we didn't exactly say what you think we did". It remains fraud.

ericb 6y ago

I have mixed feelings on this. Nikola has a Theranos vibe to it. On the other hand, "Citron Research" has created stock crashes on shaky ground in both Shopify and Tesla using hit pieces with claims that didn't pan out. I'm not sure if it is a stopped-clock is right twice a day thing, or if this is a poker strategy adding to EV by mixing in bluffs with solid poker hands.

nkurz 6y ago

Nikola's refutation says that "an activist short-seller whose motivation is to manipulate the market and profit from a manufactured decline in our stock price published a so-called “report” replete with misleading information and salacious accusations directed at our founder and executive chairman. To be clear, this was not a research report and it is not accurate. This was a hit job for short sale profit driven by greed." It seems clear that they are right that the report is driven by "greed" and "short sale profit", and that the goal is drive down their stock price. The more important question, though, would seem to be whether the accusations are true. Are there any Nikola supporters here who can debunk any of the bullet points at the top of the Hindenburg report: https://hindenburgresearch.com/nikola/ https://hindenburgresearch.com/nikola/. Conclusively refuting any of them would be useful, but the most important ones to me are the ones involving their demos. Did they lie to the public about the functionality of their vehicles at the time? Or did they merely mislead the public with language like "in motion" and "cruising" to describe a truck rolling down a natural incline? Does that distinction matter to you, or only as relates to potential SEC action? (I'm currently holding some puts that I bought---slightly too late to be profitable yet---as a result of Hindenburg's report, making me effectively short NKLA)

eanzenberg 6y ago

Lol

m3kw9 6y ago

Smearing his current company based on his past makes the short case less trust worthy

liability 6y ago
When somebody decides to 'cash out' their reputation by conning people for years, I can't be sympathetic to their whining about nobody trusting them anymore. That's how reputation works and there's nothing unfair about it.
ogre_codes 6y ago
> Smearing his current company based on his past makes the short case less trust worthy So you'd invest in Elizabeth Holme's next bio-tech startup?
- m3kw9 6y ago
  Less likely but would need to closely scrutinize it more than before. I believe in 2nd chances.
  - ogre_codes 6y ago
    Fool me once, shame on you. Fool me twice, shame on me. Second chances are for people who make mistakes, not for people who engage in fraud and deception. If you give me the shaft consciously and knowingly, it's a long road to get my trust back.

ahelwer 6y ago

CEO claiming all the allegations are false, factual refutations totally exist, but they can't publish those refutations until the SEC "finishes their job". What a scam artist. Always some excuse, always delays, just milking the fraud as long as possible.

xenospn 6y ago
Sounds exactly like trump “not releasing his taxes because they’re under audit”. I guess they both read the same book.

aazaa 6y ago

There's a simple antidote to the claims: ship products. The company appears to have trouble doing this, and AFAICT has not shipped a single production vehicle. Nikola should focus on that, not trying to levitate the company's share price higher by jawboning. The comparison to Theranos is apt in that the response of that company was to jawbone rather than ship.

cultus 6y ago
They could completely discredit the Hindenberg report simply by release a video of the truck clearly driving under its own power. They haven't, and instead are just issuing these legal threats against shorters. This hysteria against short sellers in some circles is great for hiding fraud. Wirecard also comes to mind.
- liability 6y ago
  Anti-short hysteria has been bugging me recently. It seems to be a recent trend and when I try to think who might have triggered it, I come up with one clear answer...
- postingawayonhn 6y ago
  They do have drivable prototypes now (of the Two, not the One) and there's plenty of videos. How well designed/built they are is another question.
  - cultus 6y ago
    If they are lying about the drivability of One (which they almost certainly are), what does that say about Two? They've fairly obviously faked other tech, including covering up an OEM logo on an ostensibly original piece of tech with duct tape.

diogenescynic 6y ago

Threatening to sue short sellers always seems desperate.

reitzensteinm 6y ago

I don't understand Nikola at all. There are so many red flags, yet large credible companies appear to be willing to partner with them and buy from them. I suspect the terms are probably quite one sided, but even then there's reputation risk for partnering with the next Theranos. I listened to the CEO talk for an hour about their dedicated route hydrogen business model for trucking, and it actually seems like a good idea. The thesis is that 25% of trucks drive back and forth on the same route for their entire lifetime, so you pick the busiest route, build a hydrogen station on it, and sell a bunch of trucks to use it at capacity. This avoids the chicken and egg problem of building thousands of stations everywhere before you can sell your first vehicle. I don't know anything about the industry, and I wouldn't trust their ability to execute, but the plan itself seems sensible. As the renewable grid share increases, there's going to be a bunch of excess capacity at times that can be used very cheaply, meaning the end to end efficiency of hydrogen may not be a deal breaker. Without a multiple of current battery energy density, long range BEV trucking will be tough. Then there's the Badger/GM partnership. They got Iveco to make their trucks, and now they're getting GM to make their pickup. It makes me wonder if their strategy is going to be permanently outsource manufacturing and try to be a Pepsi to Tesla's Coke, partnering with traditional manufacturers which are able to build vehicles technically, but lack the modern sexiness of the new crop of BEV car makers. But if they do pull any of this off, it's going to go down as one of the greatest fake it til you make it examples in modern history. They probably did bullshit their way in to this market cap - I wouldn't be surprised if every word of the short seller report is true. But the market cap does opens doors.

gridlockd 6y ago
The plan still does not make economical sense without massive reductions in the cost of hydrogen or massively more valuable carbon credits. However, if carbon credits become more valuable, synthetic gasoline will become economical as well. Those are all big ifs. As far as I can tell, Nikola is bringing nothing to the table but hot air. No breakthrough in hydrogen production nor batteries nor engines, nothing that existing car makers do not already have.
- cwhiz 6y ago

akrymski 6y ago

I don't think the comparison to Theranos is accurate. Nikola may be overvalued, but they do have (billions?) loads of pre-orders for hydrogen trucks. Manufacturing the vehicles isn't rocket science - lots of companies are manufacturing hydrogen buses that are in use in EU for example. The tech definitely exists, the same way battery tech existed before Tesla. Hydrogen makes more sense for trucks as it's lighter, and by outsourcing manufacturing most of the risk is removed. PS Email me if you are interested in building a hydrogen powered flying vehicle.

bfieidhbrjr 6y ago
The preorders mainly come from a company with tiny assets, I think sub $100m. It's hot air.
- pepy 6y ago
  "U.S. Xpress had only $1.3 million in cash on hand last quarter."
sixQuarks 6y ago
By preorders, you mean an email list of people who said they’re interested, but left no deposit whatsoever.
nickik 6y ago
Just outsource everything even outsourcing itself. Why do you even have company, you can just sit in your basement and order a bunch of trucks from another company have some contractor put new stickers on it and ship them to costumers. Pay somebody else to set up the fuel station, do the repairs and so on. The costumer service you outsource to India. You don't even need more then 1 employ, you can chill while that employ does all the outsourcing. I'm sure that company would be bigger then Apple soon. I mean no labor cost, no capx and a huge market. What a genius move.
jariel 6y ago
The orders are not paid up and many from companies with bad balance sheets. The truck is vaporware and Nikola has no experience actually making or doing anything. So bringing anything in on time and anywhere near cost is going to be a challenge. "PS Email me if you are interested in building a hydrogen powered flying vehicle." - that's such an HN thing to write!

llboston 6y ago

I have no insider info but leaning to believe that at least Hindenburg Research's report is partially correct based on a few things: 1. I listened to Nikola founder Trevor's interview on Jason Calacanis's podcast, and was sold on the advantage of Hydrogen fuel cell over battery for long haul trucks. Such a huge market! And then Trevor said Nikola, a 400 people company, are also working on the an electric pickup called Badger to be more consumer facing. This makes no biz sense to me at all and I realized they are probably just chasing the trend. 2 At the time Nikola doing the first Earnings call ever, Trevor was on a 6-day vacation in the Bahamas, while bragging about having a $13 Million airplane. Trevor is no Elon. No matter how much you hate Elon, he works his butt off, and that gets my respect automatically. 3 I understand Nikola want to protect their trade secrets and go through SEC first, but in their press release [2] they have shown nothing to prove that Hindenburg Research's report is wrong. [1] https://thisweekinstartups.com/e1090-nikola-founder-trevor-milton-on-competing-with-tesla-hydrogen-over-battery-going-public-as-a-pre-revenue-company-more/ https://thisweekinstartups.com/e1090-nikola-founder-trevor-m... [2] https://nikolamotor.com/press_releases/nikola-refutes-allegations-95 https://nikolamotor.com/press_releases/nikola-refutes-allega...

bfieidhbrjr 6y ago
The SEC thing is a smokescreen. There is no reason to go to or via the SEC for their rebuttal, if anything they're just trying to get ahead of the PR nightmare of the SEC going to them. Them staying silent and sending info to the SEC is a big red flag, but to the lay investor it looks good, which is why they did it.
- deleted 6y ago
  [deleted]
jdmichal 6y ago
I also find the specific wording of the counter interesting. They don't actually say anything is untrue, but instead use terms like "misleading information", "salacious accusations", and "not accurate". So I have a really hard time believing that the report is not onto something, because it definitely sounds like legal was consulted on the wording. It is very specifically phrased to, say, allow the reported facts to be true but the interpretation of the facts to be wrong.

projektfu 6y ago

Legal action? Did they lie (libel)? Did they fail to disclose their position?

brianwawok 6y ago

Let's pretend everything is true as presented. Maybe a little marketing exaggeration, but a real product is close to ready. Cool. Looking at various sources such as https://www.greencarreports.com/news/1127660_battery-electric-or-hydrogen-fuel-cell-vw-lays-out-why-one-is-the-winner https://www.greencarreports.com/news/1127660_battery-electri... I just don't see the case for hydrogen over battery? It surely can cost less, but I see battery pricing dropping every year. In the 20 year timeframe, is hydrogen still a big win over batteries? Is there something fundamental about the technology that makes storing hydrogen better than batteries?

Hypx 6y ago
I see batteries not getting much cheaper at all, and likely hitting some plateau in cost reductions. It wouldn't surprise me if it is followed by cost increases as demands for sustainable production and recyclability increase. Hydrogen is not just cheaper than batteries, but fundamentally cheaper in a way that batteries can never match. For instance, underground storage is at the cents per kWh of storage. So batteries can never get there. In 20 years, I suspect FCEVs will have taken over, with BEVs mostly abandoned as being too expensive to justify their existence in most circumstances.
- brianwawok 6y ago
  Fundamentally I agree that FC storage can be very cheap. Just a metal tank with some valves or whatever, right? a) What stops the fundamentals of batteries from also continuing to get cheaper? Current batteries are using less of some expensive metals, is there some kind of law that is going to make us hit a wall at current battery pricing? I don't see this yet, nor have I seen research papers, but I may have just missed them? b) The way I understand it, is the cost of creating the Hydrogen is the expensive part now. Is there proof that it will be cheaper with time, and that the end state of producing hydrogen is cheaper than the end state of producing batteries?
  - Hypx 6y ago
    You need a lot of metal, especially if you want a big battery. Realistically we're not going to see batteries much cheaper than what we have now. Hydrogen is likely to be cost of green energy plus some additional cost factor. So if solar is $0.02/kWh, then hydrogen will be maybe 2x that in the very long run. Everything points to hydrogen eventually getting to around $1/kg, or cheaper than just about any other kind of fuel.

samizdis 6y ago

Reasonably measured take on the story from the FT: https://www.ft.com/content/8a8a2396-6e97-4cfd-9f80-c5aaa2de304f https://www.ft.com/content/8a8a2396-6e97-4cfd-9f80-c5aaa2de3... Sadly, I've not been able to find a non-paywalled version syndicated anywhere else. (Although it can be retrieved at archive.is) Some interesting quotes from the article: In this relentless barrage of hype, delivered in a disarmingly low-key manner, it is easy to forget the reality. Nikola has yet to put any vehicles into production. And, as its regulatory filings make clear, it has no orders at all for its fuel cell trucks, only non-binding reservations. As for all the technological brilliance ... there is precious little to be seen. Nikola boasts a grand total of only 11 patents in the US, with another 55 applications pending. And later: Nikola faked a video of one of its trucks by making it look like the vehicle was driving under its own power when it was really only rolling downhill, according to Hindenburg’s report — a claim backed up by FT reporting this week. “It was built to be a working prototype,” Mr Russell insists of the truck. But did it actually work? His answer, after a long pause: “I wouldn’t comment on that.” In its pay-off, the FT draws pointed comparisons with Theranos. A good read, wherever the truth lies.

imglorp 6y ago
I'm a little curious about the (allegedly?) rigged demos. There's dozens of youtube garage tinkers who could slam some off the shelf parts into a random salvage chassis in under a week. Maybe they won't meet many performance targets but they'll at least be able to show something moving under its own power. The point is, making one electric or H2 vehicle is a very low bar now. Making one manufacturable, and a production line to do it, is the hard problem. So why show a nonworking sham?
- jboog 6y ago
  Yeah you're right, it's all so bizarre. This dude IPOd a unicorn startup and is (for now) a billionaire by selling a vision of a manufacturing company with a non-working prototype that literally almost anyone with modest engineering skills could pull off. The Founder has no engineering background (in fact no college degree), no experience in the vehicle industry, no brilliant engineers or killer patent on technology. It smelled super fishy when they first IPO'd but I figured since all these VCs and vehicle manufacturers were partnering with them there must be something under the hood. Now it seems like such a transparent fraud. How did so many people that should have known better get conned into this?

tomdell 6y ago

That GM entered into a highly valuable partnership with this transparently fraudulent company doesn’t inspire confidence about their future. Milton’s last company was accused of not delivering on deal terms, and it seems as though that company BSed their way to an acquisition. Before that, he was involved in random low-tech businesses - at least one of which he seemingly lied to a partner about his profit off of. The company’s name is so unoriginal that I wonder how anyone can take them seriously. It’s like an off-brand Tesla - just riding the association to trick people into parting with their money?

Qub3d 6y ago
I suspect, as does Hindenburg research, that GM saw the Nikola partnership as more of a PR spend than a partnership. Its about the optics.

nimish 6y ago

Companies that spend time agitating about short sellers have a straightforward way of shutting them down: proving they are a legit, going concern and bankrupting shorts. That's the nature of the game when you're trying to sell shares. It's on you to prove you are a real company. The SEC requirements are because prior to them companies lied all the damn time and got away with it

bitxbit 6y ago

Nikola isn’t really an innovator in my view. They take what’s out in the market and assemble them which is not really that practical when it comes to manufacturing vehicles. This is like me saying I have an automobile company for nuclear powered trucks. And they should be valued as such. There are a lot of electric car manufacturers putting in real work such as Bollinger Motors.

switch11 6y ago

This is interesting to me I watched some videos of Trevor Milton. He has ZERO signs he is faking HOWEVER A) Just because someone's body language and presentation is PERFECT doesn't mean they are telling the truth. They might have convinced themselves of the lie B) The Truck Video is SUPER DODGY. It's shot from an angle that makes it impossible to tell what the incline angle is. It could VERY easily be just a truck with no engine rolling down a slight incline C) The walkthroughs etc. Trevor Milton does are SUPER DODGY. Elon Musk with Tesla talks about crazy things that might never happen (Full Auto Pilot Level 5 Driving) but half of the crazy stuff he DELIVERS Trevor Milton seems to be just as good as Musk at promising things, but so far has not delivered anything * On the one hand, it would be great if Nikola delivers a great truck Competition for Tesla Death to these parasitic short sellers ON THE OTHER HAND Don't see what exactly is the VALUE Nikola is providing. GM is building everything. So is Nikola's contribution selling a great story ??? It's like Musk's ability to sell stories, but lacking Musk's abilities to A) get subsidies from the government B) actually deliver products Trevor Milton and Nikola are getting money from the stock market. That comes with a lot of dangers which government contracts and subsidies do not

liability 6y ago
Did you believe short sellers are "parasites" before Elon Musk started ranting about them, or did you get this idea from him?

raiyu 6y ago

Does anyone have issue with the name of company besides me? I mean the largest EV manufacturer is Tesla and they name their company Nikola? It’s like years ago when public companies would rebrand as blockchain companies and see their stock soar.

liability 6y ago
I think this was one of the first red flags. It reminds me of ripoff movies that have names similar to popular movies to sleaze some of that popularity for themselves. Like Transformers / Transmorphers.

bryanlarsen 6y ago

Interesting to compare against Lucid Motors. Founded thirteen years ago and still not shipping, dismissed as vaporware for so long, yet are now surprising people by getting production versions of their car to early reviewers. https://m.youtube.com/watch?v=7ZkuJY1GWtE https://m.youtube.com/watch?v=7ZkuJY1GWtE

mschuster91 6y ago

Lawsuits against shortsellers? Where did we have that just recently? Oh yeah, Wirecard - or as we call it in Germany "Auweiacard"...

exabrial 6y ago

How much is their CEO getting paid vs what have they delivered? There are _definitely_ _a_ _lot_ _of_ red flags.

jariel 6y ago

$30 Billion valuation with no product, no customers. Insiders taking millions out of the company. Lied about major IP developments and ownership (Hydrogen, Fuel Cells, parts) This is insane, and I can't believe that GM would go near this toxic pile of garbage, it's utterly shameful and makes GM execs look completely stupid and incompetent. GM is getting an 'inspired truck idea' - how hard would it be to create a little independant division and hire some freaking designers and inspire people a little bit? Which would be good for their whole company? Nikola looks like fraud, but they're just a scammers, in a way it makes GM look worse.

darksaints 6y ago

Its unfortunate that their failures are going to prevent VC investment in fuel cell tech for the next couple of decades. Some suggestions, not that they're listening: 1) deliver one thing before promising the next 2) Use SOFCs, not PEMFCs. They're more stable, more efficient, longer lasting, higher power density, can use hydrocarbon fuels if necessary, produce heat at useful temperatures, and they're way cheaper. Their only disadvantage is their startup times, which is not a problem, and never has been, for long haul trucking. 3) Choose your competitors better. You have zero expertise in building trucks, but you have amassed expertise in building fuel cell power plants. Lucky you: trucking is nothing like cars...alternative powerplant manufacturers are extremely common upgrades when buying a truck. Instead of competing with Peterbilt, you should be competing with Cummins as a supplier for Peterbilt. And when you've pierced that market, you start going after Mitsubishi, Wartsila, Hyundai, Rolls Royce, and MAN.

saberdancer 6y ago

I really dislike the name of the company. Screams copycat and scam.

new_realist 6y ago

It's amusing to see Tesla stans hate on Nikola, when the two companies' characteristics and tactics are almost identical. Any criticism that applies to Nikola applies to Tesla, and vice versa. If anything, Nikola is moving more quickly than Tesla did early in its 17 year history.