Nikola says its legal woes are over. Now its dogged by parts shortages

Nikola had been telling investors that it planned to start delivery of 50 to 100 of its hydrogen-powered and electric trucks in the fourth quarter — enough to generate $15 million to $30 million in the period.

But on Tuesday the company cut those forecasts in half, to between 25 and 50 trucks, and acknowledged that supply shortages of chips, electric vehicle batteries and other parts could prevent the sales from being completed. As such it dropped revenue forecasts to between $0 and $7.5 million.

It’s a been a bad week for Nikola, which had already been under scrutiny thanks to its ambitious promises about customer orders and progress on developing new trucks — scrutiny that forced the exit of its founder, who was indicted last week on counts of lying to investors.

It all began when short seller Hindenburg Research, a firm that specializes in making bets against companies by shorting its stock position, came out with a note last September accusing Nikola of false claims about its progress.
That sent share prices plunging — they have lost 80% of their value since the Hindenburg report and dropped another 7% in Tuesday — and forced the company’s founder and executive chairman Trevor Milton to quit.
Then last week, Milton was indicted by a federal grand jury. Audrey Strauss, US attorney for the Southern District of New York, accused him of false and misleading statements about “nearly all aspects of the business.” Milton also faces a civil complaint from the Securities and Exchange Commission.

Nikola CEO Mark Russell took pains during an investor call Tuesday to note the company is not named in either of these actions.

“That is the elephant in the room,” Russell said when asked about the company’s legal woes during the call. “The 100 pages of charges are against Trevor personally, and nothing said by anyone else at the company was mentioned at the indictment.”

Russell said the company is focused on getting the trucks it is building and testing completed and into the hands of customers, although he conceded that Milton’s indictment “is a potential distraction.”

Those comments did little to satisfy Hindenburg.

“As expected, they dodged the question,” the firm said in a statement. “They seem to be whistling past the graveyard at this point.”

Nikola founder Trevor Milton is indicted for allegedly lying about 'nearly all aspects of the business'

As for the supply problems, Russell added on the call that the company is looking to build some trucks without the unavailable components, then have them installed at a later date. That way Nikola’s launch customers can start using testing the trucks, even though the sales will not be officially completed.

“The truck is usable, just not salable,” Russell said. “We just won’t be able to transfer title.” But he said the launch customers are willing to accept the trucks with that limitation.

Source link

Spread the love

Written by bourbiza

Olympic riders say life-size statue of sumo wrestler may have ‘spooked’ several horses

Inside Australia’s Covid jab blitz with stadiums, carparks to be transformed into vaccine hubs