Nikola Shares Rampage After Short Seller Claims Denied, SEC Investigation Report

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On Monday, shares of electric truck maker Nikola Corp.

After falling around 8% on the stock market early in the morning, shares of Nikola NKLA,
+ 11,39%
surged after the company issued a rebuttal, closing more than 11%. But much of those gains evaporated after hours, following a Bloomberg News report that the SEC was examining claims by short-seller Hindenburg Research. Nikola ended the extended session down 8%.

Hindenburg last week called Nikola a “complex fraud,” alleging that the company had made false claims and claims about its technology. On Monday morning, Nikola called the report “false and misleading” and offered a detailed rebuttal of Hindenburg’s accusations, citing “dozens” of inaccuracies.But Nikola did not dispute that a 2018 promo video that looked like an autonomous truck in action actually showed the truck driving downhill. Nikola “never said his truck was powered by its own power in the video,” the company said.

Nikola also said he “proactively contacted and informed” the SEC of Hindenburg’s report, saying it was designed to manipulate the market for the benefit of short sellers. In a statement, Nikola said he “welcomed the involvement of the SEC in this matter.”

But its stock fell in prolonged trading after a late-afternoon Bloomberg report that the SEC was also reviewing Hindenburg’s claims that Nikola violated securities laws by deceiving investors. Bloomberg said the review was preliminary and could not lead to an investigation.

Wedbush analyst Dan Ives takes a wait-and-see approach, saying on Monday that Nikola is a ‘prove me’ stock, while keeping a neutral rating.

Nikola shares rose last week after General Motors Co. took a $ 2 billion stake in the company and announced a “game-changing” partnership to build an electric pickup. GM chief executive Mary Barra told CNBC on Monday that GM conducted “due diligence” before the deal.

Nikola’s shares have fallen 47% in the past three months, but are still up almost 250% since the start of the year.

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