Nikola Corp. founder, Trevor Milton, has been offloading stock ever since he was indicted for making misleading and/or blatantly false statements about the company. The formal charges were issued in July, piggybacking off a critically damning report from 2020 that alleged Nikola had grotesquely misrepresented its production capabilities and falsified a video where it showed an inoperable prototype vehicle working as if it was fully functional. The paper caught the attention of both the Securities and Exchange Commission (SEC) as well as the Department of Justice (DOJ) — resulting in Milton stepping down as CEO and twelve months of investigative probes.
According to Bloomberg, the founder dumped 11.7 million shares of Nikola in a series of transactions that wrapped up on Tuesday. That was estimated to be worth about $131 million and stacks with $153 million of stock Milton sold in August of 2021.
Federal prosecutors took issue with his claims about the startup’s first semi-truck prototype, which was inoperable; a battery-electric and hydrogen-powered pickup that amounted to little more than design sketches; and Nikola’s hydrogen production capabilities, battery-development work and customer orders.
Nikola announced earlier this month it was in talks with the U.S. Securities and Exchange Commission to resolve its investigation and expects to pay a $125 million civil penalty. The company ended September with about $587 million in cash.
While the vehicle startup saw its valuation plummet immediately after last year’s scandal, its share price has been comparatively stable in recent months. But it’s still trending down and Milton may need a bunch of money to help cover some sizable legal bills.
But this is also what rich people do, especially when they happen to be in charge of an EV startup. Milton, and those like him, are too often the modern equivalent of a snake-oil salesman. Some businesses barter untested mobility solutions, typically targeting small cities desperate to revitalize their image. Others simply go big and sell the dream of emissions-free transportation without a hint of how it’s to be accomplished. Though the result is always the same, a public that buys in and executives that cash outright when the company begins to tank. The resulting funds are then put into assets yielding legitimate value (e.g. fancy homes) and sometimes recirculated into the next business venture.
This is hardly limited to the automotive realm, of course. Fraudulent businesses and misleading marketing predate recorded history. But there’s clearly a surplus in several modern sectors of commerce, with EV startups occupying a spot somewhere near the top.
While we cannot say that Milton had premeditated plans to con Nikola investors, there’s a case being made to prove that’s exactly what happened. Though it pretty much always feels like these kinds of financial shenanigans fall short of anything that can be considered true accountability. My guess is that the decades-old sexual impropriates that always seem to come after larger, more-actionable scandals, will continue to follow Milton around in the media. Trevor supposedly abused his underage cousin at a funeral when he was 18. But those allegations will quickly dissipate once the public has lost interest or he’s issued a slap on the wrist for the as-of-yet-unproven industrial misdeeds.
Then, assuming that we’re sticking to the modern manner of “doing business,” he’ll reemerge a few years later to announce some miraculous product that he’ll be able to mass-produce after investors have poured a few billion into his new company. Meanwhile, Nikola will throw a few employees under the bus and be faulted for having a “toxic corporate culture” that can only be ended by adding more female executives. Your guess is as good as mine on whether or not the company will ever mass-produce electric and hydrogen-powered vehicles, however.
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