8 ms·

After Theranos and Wirecard, I'm surprised how much benefit of the doubt Nikola is being given

ksdale 6y ago
At this point it seems like Nikola is not at all what it seems, but I've actually been surprised in the opposite direction. For a couple days, news of Nikola being fraudulent were all over everywhere, and when I finally clicked on the link, it's from... someone who is obviously shorting the stock. Every short seller ever tries to convince everyone that the companies they're shorting are doing all sorts of shady stuff. In this case, everything in the report looks legit, but the number of people credulously citing this report without anyone mentioning that Hindenburg has a massive financial incentive to have Nikola implode has been surprising.
- deleted 6y ago
  [deleted]
- zwily 6y ago
  Nobody has mentioned they are a short seller? Every article I’ve seen about it mentions it, and Hindenburg themselves are clear about it. You should certainly take that into account when analyzing their report, but it does not mean they should be disregarded.
- tsycho 6y ago
  But that's standard, no? The only organizations that publish equity research are investment banks (which rarely publish negative articles since they want to be part of potential future M&A activity), and hedge funds. This type of research takes significant time and effort, and almost no one else does this except short selling hedge funds.
- bhupy 6y ago
  Hindenburg has been pretty upfront about their short position, as has most reporting. OTOH, short sellers actually have skin in the game, they're putting their money where their mouths are. It's an important mechanism in the public market, which counteracts the existing bias in favor of stock value appreciation on account of shareholders endlessly shilling the stock.
vmchale 6y ago
Literally got investors because their name sounds like Tesla lol
- carlosdp 6y ago
  That literally should have been a red flag from the get go. What ultimately successful company names themselves based on a leading competitor?
  - liability 6y ago
    If you look at the HN discussion about Nikola four years ago, it's filled with people pointing to the copycat name as a redflag. So even without hindsight, this was obvious. > They could have tried a little harder with the name. It makes me take them less seriously with a copycat name like they're not confident enough in their product and need to glom onto Tesla's success. What an awful decision. The truck looks neat, though. Response to the above: > I don't think that truck is ever seeing the light of day; the name and the rest of it all seems incredibly unlikely to materialize except as some money in someone's pockets."
- brian_herman__ 6y ago
  It is literally Nikola Tesla's first name. https://en.wikipedia.org/wiki/Nikola_Tesla https://en.wikipedia.org/wiki/Nikola_Tesla Tesla, the electric car company is his last name. Nikola is his first name. edit: Spelling
  - dylan604 6y ago
    Also, water is wet and fire is hot. Sadly, Captain Obvious doesn't have any links to back up those claims though.
- cultus 6y ago
  Just to show how absolutely demented our financialized economy has become, look at the stock of Tiziana Life Sciences this year, with stock symbol TLSA: https://markets.businessinsider.com/stocks/tlsa-stock?utm_source=markets&utm_medium=ingest https://markets.businessinsider.com/stocks/tlsa-stock?utm_so...
m00dy 6y ago
These are all indicators of a problem in the market.
CarelessExpert 6y ago
> After Theranos and Wirecard, I'm surprised how much benefit of the doubt Nikola is being given Thank Elon. His war on shorts has created a narrative that's gotten eaten up in the tech sector. Heck, you can see it in the comments on this post. We poor tech companies are just the victims of these big, bad, evil short sellers. If you'd just leave us alone, man, so much disruption! We just need a few more billions and, we swear, we'll be profitable in no time. Edit: Apparently people are getting very confused by the point I'm making here. I'm not saying Telsa and Nikola are equally fraudulent. I'm saying Elon Musk is responsible for pushing and promoting a narrative to de-legitimize short sellers, and in doing so, has undermined an important function in the markets that helps prevent companies like Nikola and Wirecard from succeeding in defrauding the public.
- bob33212 6y ago
  Actually, people with engineering backgrounds see a huge difference between Elon and this guy. It is Wall Street who doesn't understand and is afraid to get burnt by NKLA the way other naysayers were burnt on TSLA.
  - CarelessExpert 6y ago
    > Actually, people with engineering backgrounds see a huge difference between Elon and this guy. I didn't say Elon and this guy were similarly shady. I said Elon has been a huge voice in pushing and promoting a narrative that short sellers are evil, and that then allows frauds like Nikola and Wirecard to flourish. And I stand by that statement. In what way am I wrong?
    - bob33212 6y ago
      TSLA has sued NKLA for IP theft. I have a hard time seeing how they are pushing a narrative that short sellers of NKLA are evil.
      - samizdis 6y ago
        Actually, Nikola sued Tesla: https://arstechnica.com/cars/2018/05/nikola-motors-sues-tesla-for-2-billion-over-alleged-design-patent-infringement/ https://arstechnica.com/cars/2018/05/nikola-motors-sues-tesl...

At this point it seems like Nikola is not at all what it seems, but I've actually been surprised in the opposite direction. For a couple days, news of Nikola being fraudulent were all over everywhere, and when I finally clicked on the link, it's from... someone who is obviously shorting the stock. Every short seller ever tries to convince everyone that the companies they're shorting are doing all sorts of shady stuff. In this case, everything in the report looks legit, but the number of people credulously citing this report without anyone mentioning that Hindenburg has a massive financial incentive to have Nikola implode has been surprising.

deleted 6y ago
[deleted]
zwily 6y ago
Nobody has mentioned they are a short seller? Every article I’ve seen about it mentions it, and Hindenburg themselves are clear about it. You should certainly take that into account when analyzing their report, but it does not mean they should be disregarded.
tsycho 6y ago
But that's standard, no? The only organizations that publish equity research are investment banks (which rarely publish negative articles since they want to be part of potential future M&A activity), and hedge funds. This type of research takes significant time and effort, and almost no one else does this except short selling hedge funds.
bhupy 6y ago
Hindenburg has been pretty upfront about their short position, as has most reporting. OTOH, short sellers actually have skin in the game, they're putting their money where their mouths are. It's an important mechanism in the public market, which counteracts the existing bias in favor of stock value appreciation on account of shareholders endlessly shilling the stock.

vmchale 6y ago

Literally got investors because their name sounds like Tesla lol

carlosdp 6y ago
That literally should have been a red flag from the get go. What ultimately successful company names themselves based on a leading competitor?
- liability 6y ago
  If you look at the HN discussion about Nikola four years ago, it's filled with people pointing to the copycat name as a redflag. So even without hindsight, this was obvious. > They could have tried a little harder with the name. It makes me take them less seriously with a copycat name like they're not confident enough in their product and need to glom onto Tesla's success. What an awful decision. The truck looks neat, though. Response to the above: > I don't think that truck is ever seeing the light of day; the name and the rest of it all seems incredibly unlikely to materialize except as some money in someone's pockets."
brian_herman__ 6y ago
It is literally Nikola Tesla's first name. https://en.wikipedia.org/wiki/Nikola_Tesla https://en.wikipedia.org/wiki/Nikola_Tesla Tesla, the electric car company is his last name. Nikola is his first name. edit: Spelling
- dylan604 6y ago
  Also, water is wet and fire is hot. Sadly, Captain Obvious doesn't have any links to back up those claims though.
cultus 6y ago
Just to show how absolutely demented our financialized economy has become, look at the stock of Tiziana Life Sciences this year, with stock symbol TLSA: https://markets.businessinsider.com/stocks/tlsa-stock?utm_source=markets&utm_medium=ingest https://markets.businessinsider.com/stocks/tlsa-stock?utm_so...

m00dy 6y ago

These are all indicators of a problem in the market.

CarelessExpert 6y ago

> After Theranos and Wirecard, I'm surprised how much benefit of the doubt Nikola is being given Thank Elon. His war on shorts has created a narrative that's gotten eaten up in the tech sector. Heck, you can see it in the comments on this post. We poor tech companies are just the victims of these big, bad, evil short sellers. If you'd just leave us alone, man, so much disruption! We just need a few more billions and, we swear, we'll be profitable in no time. Edit: Apparently people are getting very confused by the point I'm making here. I'm not saying Telsa and Nikola are equally fraudulent. I'm saying Elon Musk is responsible for pushing and promoting a narrative to de-legitimize short sellers, and in doing so, has undermined an important function in the markets that helps prevent companies like Nikola and Wirecard from succeeding in defrauding the public.

bob33212 6y ago
Actually, people with engineering backgrounds see a huge difference between Elon and this guy. It is Wall Street who doesn't understand and is afraid to get burnt by NKLA the way other naysayers were burnt on TSLA.
- CarelessExpert 6y ago
  > Actually, people with engineering backgrounds see a huge difference between Elon and this guy. I didn't say Elon and this guy were similarly shady. I said Elon has been a huge voice in pushing and promoting a narrative that short sellers are evil, and that then allows frauds like Nikola and Wirecard to flourish. And I stand by that statement. In what way am I wrong?
  - bob33212 6y ago
    TSLA has sued NKLA for IP theft. I have a hard time seeing how they are pushing a narrative that short sellers of NKLA are evil.
    - samizdis 6y ago
      Actually, Nikola sued Tesla: https://arstechnica.com/cars/2018/05/nikola-motors-sues-tesla-for-2-billion-over-alleged-design-patent-infringement/ https://arstechnica.com/cars/2018/05/nikola-motors-sues-tesl...