General Motors CEO says the company stands by its Nikola deal as the startup's short-seller fight intensifies (NKLA, GM)

GM CEO Mary Barra at Nikola event

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General Motors chief executive Mary Barra said Monday that the company still has full faith in its deal with electric truck startup Nikola Motors as its fight with a short-seller intensifies.

“The company has worked with a lot of different partners and we’re a very capable team that has done the appropriate diligence,” Barra said at an event hosted by RBC Capital Markets, just hours after Nikola published a rebuttal to Hindenburg Research’s claims of fraud and deception.

In its response, Nikola admitted it staged a promotional video by rolling an inoperational truck down a hill, but claimed the move wasn’t deceptive because it didn’t say the truck was driving itself. It also brushed off claims about past contracts and development partnerships with other automakers like Germany’s Bosch.

“On the strength of the deal we put together,” Barra continued, referencing GM’s signed, non-cash deal with Nikola worth some $2 billion, “it validates our technology, it allows us to have more people using the technology, which gives us the advantage of scale and which will help us drive costs down.”

After Nikola’s response, which left Hindenburg feeling particularly vindicated, the SEC was reported to be looking into the firm’s fraud allegations. Nikola said it welcomes the regulatory oversight and was working with the agency to address its own concerns about the report. (The SEC has not confirmed its involvement).

“The company debunked nothing,” Hindenburg said Tuesday. “Instead it either confirmed or sidestepped virtually everything we wrote about, and in some cases raised new unanswered questions.”

Shares of Nikola fell 8% in trading Tuesday, paring some of Monday’s gains.

Wall Street seems to mostly be on Nikola’s side, too. The company’s response “speaks for itself,” RBC analyst Joseph Spak told clients.

“Nikola is a story stock now and its all about execution looking ahead through 2023,” Dan Ives of Wedbush said Monday. “If Trevor and the team can successfully build out its Arizona factory, morph prototypes into models (both on Badger and trucking front), lay the groundwork for its charging network, and catalyze delivery trucking orders with an attractive gross margin structure then the opportunity for NKLA is massive and the stock will reflect this dynamic.”

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Source: businessinsider
General Motors CEO says the company stands by its Nikola deal as the startup's short-seller fight intensifies (NKLA, GM)