Nikola’s Founder Steps Down

Trevor Milton’s Departure From Nikola

It’s been a busy start to the week for the EV industry. Investors are buzzing about Tesla’s battery day (TSLA), but electric truck maker Nikola (NKLA) is also in the spotlight. The company announced yesterday that Trevor Milton, its founder, is voluntarily stepping down as Executive Chairman and board member. Milton is being replaced by Stephen Girsky, a former General Motors (GM) Vice Chairman who helped with Nikola’s stock listing and with the partnership between the EV truck maker and GM.

The announcement about Milton’s decision comes about two weeks after Hindenburg Research, a short-selling firm, published accusations against Nikola saying the company misled investors. Hindenburg’s report said that Nikola made false claims about its technology in order to expand and partner with other carmakers, including GM. Nikola denied the accusations and the Securities and Exchange Commission is currently investigating the report’s claims.

The Impact on Shares of Nikola and General Motors

On the news about Milton’s departure, Nikola’s stock plunged as much as 37% in premarket trading yesterday. GM, which took an 11% equity in Nikola several weeks ago, also saw its shares fall 4.73% yesterday.

Nikola made a successful public debut at the beginning of the summer following a reverse merger with a SPAC. Trever Milton owns 35% of the company and saw his net worth reach $9 billion just days after the listing. Since yesterday’s stock tumble, he is now worth about $4 billion.

A Partnership With an Outside Battery Provider

Nikola also raised eyebrows after it partnered with Romeo Systems, a company that will provide battery technology for prototypes of its Nikola Tre semi-truck. This is the company’s first semi truck model, and it plans to begin selling the vehicle by 2021. Nikola previously said it created its own battery technology, so the new partnership is facing scrutiny.

The recent string of events have put Nikola in a difficult position. The company’s leadership will have to work to regain investor trust.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT SoFi SoFi helps people achieve financial independence to realize their ambitions. Our products for borrowing, saving, spending, investing, and protecting give our more than one million members fast access to tools to get their money right. SoFi membership comes with the key essentials for getting ahead, including career advisors and connection to a thriving community of like-minded, ambitious people. For more information, visit Want an easy and convenient way to manage your financial life? Get the SoFi app. For iOS and Android.

TLS 1.2 Encrypted
Equal Housing Lender