- Nikola shares fell 6% in premarket trading Tuesday after the Securities and Exchange Commission announced it was investigating a short seller's allegations that the company misled investors through "intricate fraud" and "deception".
- Short seller Hindenburg Research released an in-depth report last week in which it said the electric vehicle startup overestimated the capabilities of its first trucks.
- The report followed Nicolas' announcement of a $ 2 billion deal with General Motors. Both headlines made trading volatile. Shares are now 40% below last Tuesday's record high.
- "Nikola intends to fully cooperate with the SEC in investigating these matters," the company said in a statement on Monday.
- You can find more stories on the Business Insider homepage.
Nikola shares fell 6% in premarket trading Tuesday after Reuters reported it was the maker of electric vehicles in front of an SEC probe over allegations made by one short seller of "Complicated Fraud".
The regulatory authority's investigation follows a long report last week by short seller Hindenburg Research, who said Nikola had misled its products and deals with other companies.
The company denied all claims, saying Hindenburg was trying to capitalize on an "manufactured drop" in its share price.
"Nikola has contacted and informed the US Securities and Exchange Commission regarding Nikola’s concerns regarding the Hindenburg report," the company said in a statement on Monday. "Nikola intends to cooperate fully with the SEC in investigating these matters."
Last week Nikola signed a $ 2 billion partnership agreement with General Motors and sent the company's shares on a wild ride.
The electric vehicle maker's shares rose as much as 53% last week but fell rapidly according to the Hindenburg report. Its stocks are now 40% below record highs made last Tuesday, and most recently fell around 6% to $ 33.40 in premarket trading.
On Friday, the company also threatened legal action against Hindenburg for being accused Nepotism and deception.
The SEC will now investigate possible violations of the securities laws. However, the investigation should be preliminary and should not lead to any findings of misconduct. according to Bloomberg.
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