Pomerantz Appointed Co-Lead Counsel in Nikola Corporation Securities Litigation
On November 18, 2021, U.S. District Judge Steven P. Logan of the District of Arizona appointed Pomerantz LLP as Co-Lead Counsel on behalf of Vincent Chau, Stanley Karcynski, and George Mersho, the Lead Plaintiffs in Borteanu v. Nikola Corporation, 20-cv-1797 (D. Ariz.), a securities action brought on behalf of a class of defrauded investors concerning allegations that Nikola Corporation (“Nikola” or the “Company”) had made false and misleading statements regarding its business operations, financial growth prospects and the viability of its fuel cell technology.
Nikola manufactures commercial electric vehicles and energy solutions, providing battery and hydrogen fuel-cell electric vehicles, drivetrains, components, energy storage systems, fueling station infrastructure, and other transportation solutions to customers worldwide.
Allegations against Nikola include that: (i) Trevor Milton, the Company’s former Chairman, had repeatedly misrepresented and exaggerated Nikola’s financial, technological, and operational condition and capabilities; (ii) the foregoing misrepresentations were intended to, and did, present a false image of the Company’s financial growth and success; and (iii) as a result, the foregoing misrepresentations were foreseeably likely to subject the Company to enhanced regulatory scrutiny, enforcement and reputational harm when the truth came to light.
On June 3, 2020, Nikola announced that it would begin publicly trading on the NASDAQ. The next day, June 4, 2020, Chairman Milton touted that “Nikola is positioned to be a wonderful story of how one company can literally change the world.”
On July 17, 2020, Nikola filed a prospectus with the Securities and Exchange Commission (the “SEC”) in which it estimated the Company’s total addressable market to be “$600 billion per year with steady growth expected to continue as e-commerce and global economic growth fuel the need for more heavy-duty trucks.”
On September 10, 2020, Hindenburg Research published a report titled “Nikola: How to Parlay An Ocean of Lies Into a Partnership With the Largest Auto OEM in America” (the “Hindenburg Report”) in which it concluded that Nikola was “an intricate fraud built on dozen of lies” and “false statements” made by Chairman Milton, including allegations that the Company “staged” a promotional video of an electric truck in motion by having it simply roll downhill and that the technology that would purportedly “revolutionize the battery industry” was actually vaporware (a product which is announced to the general public but never actually manufactured nor officially canceled). On this news, Nikola’s share price fell $4.80 per share, or 11.33%, to close at $37.57 per share on September 10, 2020.
Then, on September 14, 2020, Bloomberg reported that the SEC was investigating Nikola to assess the merits of the Hindenburg Report. Then, on September 15, 2020, The Wall Street Journal reported that the U.S. Department of Justice had joined the SEC’s investigation of Nikola. On this news, Nikola’s share price fell a further $0.17 per share, or 8.27%, to close at $32.83 per share on September 15, 2020.