At least three class-action lawsuits have been filed against Nikola Corp. (NASDAQ: NKLA) and its founder and former executive chairman, Trevor Milton, since short seller Hindenburg Research published its damaging report about the electric truck startup on Sept. 10.
The lawsuits claim that Nikola, Milton and other key executives misled investors about the company’s technological accomplishments.
The lawsuits seek to recover damages for Nikola investors after stock prices plummeted following Hindenburg’s publication of a scathing report titled, “Nikola: How to Parlay An Ocean of Lies Into a Partnership With the Largest Auto OEM in America.”
Late Sunday, FreightWaves broke the news that Milton had resigned his position, effective immediately. Nikola announced Monday that it was naming Steve Girsky, a former vice chairman of General Motors Co., as Milton’s successor. Girsky’s company, VectoIQ Acquisition Corp., led the reverse merger that made Nikola a public company in June.
Shares of Nikola Corp. finished down nearly 20% on Monday, following Milton’s resignation. Shares of NKLA are off 35% since the Hindenburg report was released more than two weeks ago.
Investors file suit against Nikola, Milton
Two lawsuits have been filed in the U.S. District Court for the District of Arizona and the third was filed in the U.S. District Court for the Eastern District of New York over concerns about the validity of the company’s battery and hydrogen fuel cell claims.
The suits claim that Milton misled investors, citing a tweet of a “test” video of one of the company’s Nikola Two trucks cruising down a hill. However, a former employee claims Nikola had the truck towed to the top of a hill on a remote stretch of road and filmed it rolling down the hill, according to Hindenburg.
Nikola claims it designs all key components in-house. However, the Hindenburg research claims that Nikola actually bought its inverters from a company called Cascadia and used masking tape to cover the company’s label.
Milton called the Hindenburg piece a “hit job.”
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