Damn.
Tell you what - the Green grift was great while it lasted, but, oooh. It's gonna leave a mark on the way out.
Another EV pie-in-the-sky adventure declared bankruptcy today. This one, around the idea of manufacturing electric (and hydrogen) semi-trucks, was started by a guy named Trevor Milton and eventually got to be worth $30B before the floor fell out...or the battery drained.
Today was the day they pulled the life support for reals.
BREAKING:
— FreightWaves (@FreightWaves) February 19, 2025
Nikola Corp. filed for Chapter 11 bankruptcy protection Wednesday after failing to secure a buyer or raise additional capital. The Phoenix-based manufacturer of zero-emissions trucks announced it will pursue an auction and sale process for its assets as it grapples…
They stopped trading on the stock. Well, on the bones.
How they were ever valued at over $20B and in talks for billions of investment from GM will forever be a mistery 💀
— Romain Hedouin - Unit Police (@RomainHedouin) February 19, 2025
What makes this particular EV money pit a little more interesting than the average bear is the story leading up to this.
How on Earth did a start-up company with scandal after scandal still exist long enough to come to be valued - at one time - more than Ford?
It's a testament to the power of the cult, especially when the bureaucracy gets behind it in regulatory, legislative, and financial support.
The NetZero Green energy lobby was willing to overlook any possible detractors in a rush to shovel money out the door and have a product in hand as they forced Americans into a transition they did not need nor did they want.
The company was founded in billionaire Trevor Milton's basement in 2014, according to popular legend. It sure seems like everyone had an Elon fetish back then - they all thought it would be easy to be the next Musk, and they had the wherewithal to give it a shot, having golden boy images themselves.
...Milton is a 39-year-old college dropout who fancied himself an entrepreneur and started several businesses before he took Nikola public through a reverse merger in June. He was regularly dragged on Twitter by short sellers and FinTwit investment professionals. They mocked his transparent attempts to imitate Elon Musk and his company, Tesla. Nikola is the first name of famous scientist Nikola Tesla, the namesake for Musk’s corporation. Milton used the same hype-style as Musk in his promotion of the electric truck, which mirrors Tesla’s automobiles.
He bought a 2,670-acre property with a 16,800-square-foot, eight-bedroom, ranch-style mansion, along the Weber River in Utah for about $32.5 million. He said about his purchase, “I feel like my generation is asset light, wants smaller everything and is moving to cities, which is the opposite of what I wanted in life." Milton was accused by his cousin, Aubrey Smith, in a Tweet, of inappropriate contact.
Things were all fancy and flashy, the EV money was flowing in, and Nikola trucks started to make tantalizing appearances in photos.
Hey - they looked pretty good - like real trucks that could do things. This might actually work, and people started to get excited, especially with the enthusiastic Milton's sales pitch. Investors couldn't buy Nikola stock fast enough, even though they had yet to bring in any revenue.
nikola is the epidemy of “fake it till you make it” 🤣 it’s all good though but the stock price ran up to fast now they have to earn it before the stock gods grant them more headwinds 😎
— Your Local Realtor 🥸 (@ALLINTRADERS1) September 21, 2020
In 2020, the firm was riding a wave, a big money wave, and needed to start generating products to justify the enormous sums invested in them.
...At its peak in 2020, Nikola was valued more than Ford Motor at $30 billion, signed a multibillion-dollar deal with General Motors, and was considered the pinnacle of auto startups to go public through reverse mergers and special purpose acquisition companies.
Nikola released its first teaser video that year, and most of Wall Street and the world were bowled over by the visuals. The company proudly assured everyone it was a 'fully functioning vehicle, not just a pusher' or, in other words, it could run and didn't need to be shoved.
Pretty impressive, huh?
As I said, it was to almost everyone who watched it, except a guy who ran a hedge fund (Hindenburg Research) named Nathan Anderson, who noticed something hinky about the video.
It turns out that, technically, the company wasn't exactly lying - they hadn't 'pushed it' but they hadn't exactly said the truck in the video was 'running', either.
What Anderson discovered was that the company had towed the truck up an incline, turned it loose, and then let gravity take it back downhill in order to get the visual of the truck 'running' on the open highway.
Short seller Nathan Anderson, founder of Hindenburg Research, was one of the first to expose electric vehicle and energy company Nikola Corporation's deceptive 2020 promotional video, which showed its Nikola One truck rolling down a hill to simulate full functionality...
YOICKS
Milton's company didn't see it quite that way because, yo - they never said the truck was running. That's kind of your problem if you thought that's what they meant.
...One of the biggest allegations hurled against Nikola is that the company faked a glossy corporate video of its prototype trucks driving up an inclining highway. Short seller Hindenburg claimed that the truck was actually towed up a hill and didn't do it on its own merit. In response, the company asserted, “Nikola never stated its truck was driving under its own propulsion in the video.” Therefore, the company didn’t find it deceptive.
In mid-September 2020, the stock tanked, and Milton was forced out of the company under a cloud of accusations raining down.
But the feds had already been sniffing around. In December of 2023, Milton was sentenced to four years in prison for his 'exaggerated' claims aka 'total BS', which caused investors to lose hundreds of millions of dollars on trucks and batteries that didn't exist.
According to prosecutors, Milton had been telling some whoppers.
...Milton was convicted of fraud charges after prosecutors portrayed him as a con man after starting his company in a Utah basement six years earlier.
Prosecutors said Milton falsely claimed to have built its own revolutionary truck that was actually a General Motors Corp. product with Nikola’s logo stamped onto it. There also was evidence that the company produced videos of its trucks that were doctored to hide their flaws.
Called as a government witness, Nikola’s CEO testified that Milton “was prone to exaggeration” in pitching his venture to investors.
So little of what he claimed the company was doing was remotely true. The whole $30B exercise was Green smoke and mirrors.
...Prosecutors said Milton's improper statements included that Nikola built a pickup from the "ground up," developed batteries he knew it was buying elsewhere, and had made progress in creating a "Nikola One" semi-truck he knew did not work.
Today, a lot of trust-don't-verify Green believers took it in the shorts as it all rolled downhill.
$NKLA SPAC-era dreams → Chapter 11 reality.
— InvestorBuzz® (@investor_buzz) February 19, 2025
Retail investors took the biggest hit.
→ 80.2% of Nikola’s shares were held by the general public.#NKLA #EV #Bankruptcy
Another lesson in the books, not that anyone will learn.
Another Failing Electric Vehicle Company Nikola $NKLA
— Energy Researcher 𓃵 🏹 ♨ 𓂀 (@BakkenShale) February 19, 2025
Nikola Files for Chapter 11, Plans Quick Asset Sale Amid EV Struggles -
1st $GOEV 2nd $IDEX and 3rd $NKLA and 4th looks like $MULN will be next, in my opinion, after they did several reverse splits. pic.twitter.com/ENUA8rfXju
Or they swear they will until the next big thing comes along.
